PRE 14A
Table of Contents
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
 
Filed by the Registrant ☒     Filed by a Party other than the Registrant ☐
Check the appropriate box:
 
Preliminary Proxy Statement
 
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
 
Definitive Proxy Statement
 
Definitive Additional Materials
 
Soliciting Material under
§240.14a-12
BIOGEN INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
 
No fee required.
 
Fee paid previously with preliminary materials
 
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules
14a-6(i)(1)
and
0-11.
 
 
 
 


Table of Contents

 

 

 

 

LOGO

 

 

 

 

 

        NOTICE OF        

 

 

2024 Annual Meeting of

Stockholders and Proxy Statement

Thursday, June 20, 2024

9:00 a.m. Eastern Time

To be held online at:

www.virtualshareholdermeeting.com/BIIB2024


Table of Contents

PRELIMINARY PROXY STATEMENT – SUBJECT TO COMPLETION DATED APRIL 12, 2024

 

LOGO

April  , 2024

Dear Fellow Stockholders

Last year, the first full year under the leadership of our current Chief Executive Officer (CEO), Biogen focused on delivering for stockholders by delivering for patients:

 

   

In April we received accelerated U.S. Food and Drug Administration (FDA) approval for QALSODY, the first treatment to target a genetic cause of amyotrophic lateral sclerosis (ALS) in adults who have a mutation in the superoxide dismutase 1 (SOD1) gene. QALSODY became commercially available shortly thereafter.

 

   

In July we announced the acquisition of Reata Pharmaceuticals Inc. (Reata), adding SKYCLARYS – which had just received FDA approval as the only treatment indicated for patients with Friedreich’s ataxia –to our global portfolio of treatments for neuromuscular and rare diseases.

 

   

Also in July, we and our collaboration partner Eisai Co., Ltd. (Eisai) received traditional FDA approval of LEQEMBI, an anti-amyloid antibody for the treatment of Alzheimer’s disease which had received accelerated approval six months earlier. Subsequently, the Centers for Medicare & Medicaid Services (CMS) confirmed broad coverage of the treatment. LEQEMBI was also approved in Japan in September.

 

   

In August we and our collaboration partner Sage Therapeutics, Inc. (Sage) received FDA approval for ZURZUVAE, the first and only oral, once-daily, 14-day treatment that can provide rapid improvement in depressive symptoms for women with post-partum depression (PPD).

As our business evolves, we have worked to align our costs with our business plan as we strive to return to sustainable growth. In 2023 we launched “Fit for Growth”, an initiative that prioritized decision-making, agility, accountability and cost savings. We expect Fit for Growth to achieve approximately $1 billion in gross cost reductions by the end of 2025, and this initiative has enabled us to reinvest part of those savings in key growth drivers, new capabilities and potential future medicines.

Over the long term, our success will also require more than merely doing excellent science, bringing important therapies to market, and managing for continued financial strength. Biogen aspires to be a positive presence wherever we operate, building stronger and healthier communities through employee volunteerism, grants from the Biogen Foundation, and programs like Community Labs, which introduces students to the wonders of science. We also remain committed to advancing health equity by helping people who are underrepresented or underserved gain access to quality health care at every stage of the patient journey. We are providing access to investigational therapies, increasing participation of underrepresented populations in clinical trials and supporting Early Access Programs (EAP) and compassionate use initiatives.

As I close my first year as the Chair of the Board (Board), I want to thank my predecessor Stelios Papadopoulos for the strong foundation he helped build. As a Board – indeed, as a global company – we benefit from diverse perspectives, backgrounds, and experience in life sciences and global innovation. We are better able to deliver for stockholders because our Board has both the willingness to embrace, and the capabilities to address, the challenges Biogen will face as we focus on returning to sustainable growth. Over the past year we continued to burnish both of those strengths by refreshing the leadership of the Board and the membership and leadership of the committees, and – as of January 2024 when Monish Patolawala, the President and Chief Financial Officer of 3M Company, joined the Board – by adding two new independent directors since the beginning of 2023.

Together with my colleagues on the Board and the executive leadership team, I look forward to helping Biogen deliver more for patients and for stockholders in 2024 and beyond. Thank you for your continued support of our efforts.

 

 

LOGO

Caroline Dorsa

Chair of the Board

On behalf of the Board of Directors of Biogen Inc.


Table of Contents

Our Track Record of Responsiveness to Stockholder Feedback

 

Our Track Record of Responsiveness to Stockholder Feedback

Our Board values the views of our stockholders and other stakeholders, and we solicit input from them throughout the year. In line with past practice, we sought and received detailed feedback from our stockholders after the 2023 Annual Meeting. We received feedback on a range of topics including specific aspects of our business strategy, capital allocation, corporate governance, executive compensation and our Environmental, Social and Governance (ESG) initiatives. The stockholder engagement calls were led by our Board and Corporate Governance Committee (CGC) Chair and attended by the Chairs of the Compensation and Management Development Committee (CMDC) and/or Audit Committee and/or other independent directors.

 

Stockholder Outreach Following the 2023 Annual Meeting

 

 

We reached out to our top 40 stockholders who collectively owned:

 

  65%

of O/S Stock1

   Which included 20 stockholders
who voted Against 2023 Say on

Pay

 

We had 15 discussions with stockholders who collectively owned:

 

  47%

of O/S Stock1

   Which included 7 stockholders
who voted Against 2023 Say on
Pay

 

Independent Directors, including our Board and CGC Chair, and Chairs of the CMDC and/or Audit Committee

 

  Participated in 100% of these calls

The feedback and perspectives received from stockholders during these meetings were shared with the Board and served as an input to discussions at the Board and its committees, and ultimately informed decisions we made and actions we took.

The table below provides a summary of the recent feedback we received from stockholders, and how the Board incorporated that feedback into its actions and how these actions protect and enhance stockholder value.

 

1 As of December 31, 2023.

 

LOGO  2024 Proxy Statement    -i-


Table of Contents

Our Track Record of Responsiveness to Stockholder Feedback

 

     

Stockholder Feedback

“What We Heard”

 

 

Actions Taken

“What We Did”

 

Impact of Action

“Why It Is Important”

LOGO

  Incentives should reward executives for company performance and align payouts with stockholder value creation   92% of CEO 2024 pay and 83% of our current named executive officers (NEOs) 2024 pay is linked to either performance against preset goals or stockholder value creation  

Supports continued focus on the company’s strategy

Supports alignment of interests between NEOs and stockholders

  Most stockholders, with a few exceptions, noted they prefer performance-based equity be the majority of annual equity awards   Our long-term incentive (LTI) program consists of performance stock units (PSUs) and restricted stock units (RSUs). For 2024, increased weighting of PSUs to comprise 60% of LTI equity grants compared to 50% in 2023   Strengthens alignment of interests between NEOs and stockholders
  Many stockholders voiced that PSUs should contain additional performance metrics to provide a more balanced assessment of company performance  

For 2024 LTI grants, added an operationally focused metric based on the compound annual growth rate of our adjusted earnings per share (EPS) weighted at 50% of PSU performance

Expanded our 2024 relative total shareholder return (rTSR) comparator group to better align with market practices while weighting rTSR at 50% of PSU performance

  Better align incentive payouts with long-term company performance by providing a more balanced measurement of company performance
  Some stockholders voiced their preference for a simpler bonus plan framework, and that annual performance plan metrics should measure more than just financial performance, with pipeline metrics being commonly supported. There was mixed support for ESG metrics, and stockholders voiced support for continued market access expansion  

The 2024 Annual Bonus Plan continues to go beyond financial performance measurement, including pipeline, health equity and diversity, equity and inclusion (DE&I) metrics.

The 2024 Bonus Plan contains a simplified framework linking short-term compensation with performance.

The 2024 Bonus Plan’s ESG goal includes metrics focused on clinical trial diversity, expanding global market access for spinal muscular atrophy (SMA) patients, and workforce DE&I initiatives

 

Aligns NEO focus on broad short-term goals which supports long-term performance

Annual bonus plan multiplier is based on company performance which is assessed against quantifiable preset goals focused on financial performance and pipeline value creation

LOGO

  Many stockholders expressed dissatisfaction with the disclosure we provided about the Board changes in connection with the 2023 Annual Meeting and our process for choosing nominees to serve on the Board  

The CGC led by its new Chair adopted an enhanced nomination process that (i) leverages the Board’s succession and refreshment practices to identify skills and expertise needed on the Board, (ii) uses an independent search firm to support the CGC in conducting a broad search through a diverse pool of potential candidates and to evaluate and conduct diligence on potential candidates and (iii) provides stockholders with greater transparency on the nomination process and its objectives

Enhanced process used to identify, assess and nominate a new director in November 2023

 

Goal is to ensure that the Board has the skills, backgrounds, diversity and experience necessary to fulfill its responsibilities and provide independent oversight of management

Supports independent, comprehensive and transparent Board search and nomination process

  Greater transparency regarding our Board and management succession planning, Board refreshment practices  

Since the 2023 Annual Meeting we have changed our Board Chair and the Chairs of all of our standing committees

Added 5 of our independent directors since 2019

Eliminated age-based offer of resignation policy

New director tenure policy seeks to maintain an average tenure of 10 years or less for independent directors

 

Board is constantly evaluating its membership to determine that it has the right mix of skills, backgrounds, diversity and experience

New director tenure policy supports more deliberate Board succession planning based on annual assessment of director skills and experiences rather than the offer of resignation required under our former age-based policy

 

LOGO  2024 Proxy Statement    -ii-


Table of Contents

Our Track Record of Responsiveness to Stockholder Feedback

 

     

 

  Added additional disclosure regarding our Board and management succession planning and Board refreshment practices   Provides greater transparency to our stockholders regarding our Board and management succession planning and Board refreshment practices
    Ensure directors have the time to focus on oversight responsibilities   Reduced the number of public company boards our non-CEO directors are allowed to serve on to 4 from 5 (Biogen plus three outside public company boards; our CEO can serve on one public company board)   Goal is to ensure that each director has sufficient time to focus on the needs of the Board

Board Actions Rationale

Executive Compensation: During post-2023 Annual Meeting stockholder engagement, many stockholders conveyed a preference that our performance incentives include metrics that provide a more balanced assessment of company performance.

When evaluating changes to the design of our PSUs and informed by stockholder feedback, the CMDC added an operationally focused performance goal based on a three-year adjusted non-GAAP EPS that would further strengthen the link between pay and company performance. Further, the CMDC expanded the rTSR comparator group to better align with market practices. Finally, for 2024, the CMDC increased the weighting of PSUs to comprise 60% of LTI equity grants.

Corporate Governance: Many stockholders voiced dissatisfaction with the disclosure we provided about Board changes made in connection with the 2023 Annual Meeting and the level of disclosure about the process we used for choosing nominees to serve on the Board. In addition, stockholders requested more disclosure about Board and management succession planning, and the Board’s refreshment practices.

Informed by stockholder feedback, we made a range of changes to our corporate governance policies and practices. You will also see additional disclosure in this proxy statement about these changes.

The CGC, led by its new Chair, adopted an enhanced nomination process to identify candidates that possess the skills, background, diversity and experience to contribute to the Board and its committees. Our enhanced process begins with an assessment by the CGC of the skills and experience needed on the Board and leverages independent search firms to access a broad network of candidates and evaluate and conduct diligence on potential candidates. Potential candidate(s) are made available to be interviewed by all members of the Board prior to being nominated by the CGC for approval by the Board. Our newest director, Monish Patolawala, was identified and appointed to the Board under this updated process.

Additionally, we expanded our disclosures regarding our Board refreshment practices and Board and management succession planning processes. To enable a more deliberate Board succession planning process, after the 2023 Annual Meeting, the Board eliminated the bright-line age-based offer of resignation policy in favor of seeking to maintain an average tenure of 10 years or less for our independent directors. The Board believes that managing for overall independent director tenure strikes a better balance between retaining directors with deep knowledge of the company and adding directors with different skills and a fresh perspective rather than simply forcing directors of a certain age to offer their resignation. We also added additional disclosures so that stockholders can better understand the actions the Board takes to support Board refreshment and Board and management succession planning.

Lastly, the Board amended our Corporate Governance Principles to reduce the number of public company boards that a non-CEO director can serve on from five to four (Biogen plus three other outside public company boards; our CEO can serve on one outside public company board). The Board made this change as a result of its review of current corporate governance trends and best practices and it was also informed by stockholder feedback.

 

LOGO  2024 Proxy Statement    -iii-


Table of Contents

Executive Pay Structure Aligns with Compensation Philosophy

 

Executive Pay Structure Aligns with Compensation Philosophy

 

 
Executive Compensation Philosophy
Our executive compensation philosophy is to reward executives for the creation of long-term stockholder value. We designed performance-based compensation that is competitive with our peer group to attract and retain extraordinary leaders who perform at high levels and succeed in a demanding business environment.
       
Mission Focused and
Business Driven
  Competitively
Advantageous
 

Performance

Differentiated

 

Ownership

Aligned

We emphasize the importance of achieving short-term goals while building and sustaining a foundation for long-term success in delivering meaningful and innovative therapies to patients   We benchmark against companies we compete with for talent and our compensation is designed to recruit, retain and motivate our leadership team to achieve their best for the company and our stockholders   We endeavor to align pay outcomes with company and individual performance and reward our best performers for exceeding expectations   We provide equity to all of our employees to align their interest with our broader interest of creating long-term value for our stockholders

How Our Pay Practices Align with Our Philosophy

 

         
Practice   Mission Focused /
Business Driven
  Competitively
Advantageous
  Performance
Differentiated
  Ownership
Aligned
         

Over 85% of NEO (excluding the CEO) total direct compensation is tied to performance driven measurements

       
         

Annual bonus and LTI plan are performance-based with payouts capped

       
         

LTI awards are linked to performance, subject to multi-year vesting periods, and designed to reward long-term performance

       
         

Competitive total pay opportunities relative to peer group and broader market in which we compete for talent

       
         

Annual risk assessment to ensure our compensation programs do not encourage excessive risk taking

       
         

Robust stock ownership, anti-hedging and pledging, and clawback policies

       
         

Stockholder feedback is a key input to Board and CMDC discussions and informs actions taken

       

 

LOGO  2024 Proxy Statement    -iv-


Table of Contents

Executive Pay Structure Aligns with Compensation Philosophy

 

   
 

Corporate Governance Highlights

 

 
   

 

         

88%

 

of Directors are Independent

 

56%

 

of Directors are Diverse

 

75%

 

of our Audit Committee Members are Audit Committee Financial Experts

 

66%

 

of Committee

Chairs are Diverse

 

63%

 

of Independent

Directors

appointed in last 5

years

         

Our Board consists

of 8 Independent

Directors and our

CEO

 

Our Board includes

3 female and 3

racially/ethnically

diverse directors

 

4 of our 8

Independent

Directors are Audit

Committee

Financial Experts

 

Chairs of the

Corporate

Governance and

CMDC are diverse

 

5 of our 8

Independent

Directors

appointed since

2019

 

 
 Board Composition
     
LOGO    LOGO    LOGO
 

   

 

LOGO

  

LOGO

 

LOGO  2024 Proxy Statement    -v-


Table of Contents

LOGO

Notice of 2024 Annual Meeting of Stockholders

 

   

Date:

Time:

Virtual Meeting:

Record Date:

 

Thursday, June 20, 2024

9:00 a.m. Eastern Time

Online only at www.virtualshareholdermeeting.com/BIIB2024

April 25, 2024. Only Biogen stockholders of record at the close of business on the record date are entitled to receive notice of, and vote at, the 2024 annual meeting of stockholders (Annual Meeting).

   
Items of Business:  

1. To elect the 9 nominees identified in the accompanying Proxy Statement to our Board to serve for a one-year term extending until our 2025 annual meeting of stockholders and their successors are duly elected and qualified.

 

2. To ratify the selection of PricewaterhouseCoopers LLP (PwC) as our independent registered public accounting firm for fiscal year ending December 31, 2024.

 

3. To hold an advisory vote on executive compensation.

 

4. To approve an amendment to Biogen’s Amended and Restated Certificate of Incorporation, as amended, to add an officer exculpation provision.

 

5. To approve the Biogen Inc. 2024 Omnibus Plan.

 

6. To approve the Biogen Inc. 2024 Employee Stock Purchase Plan.

 

7. To transact such other business as may be properly brought before the annual meeting and any adjournments or postponements.

 

   
Voting:  

You will not be able to attend the annual meeting in person. Your vote is extremely important regardless of the number of stock you own. Whether or not you expect to attend the annual meeting online, we urge you to vote as promptly as possible by telephone or Internet or by signing, dating and returning a printed proxy card or voting instruction form, as applicable. If you attend the annual meeting online, you may vote your stock during the annual meeting virtually via the Internet even if you previously voted your proxy. Please vote as soon as possible to ensure that your stock will be represented and counted at the annual meeting.

 

 

Important Notice Regarding the Availability of Proxy Materials for Annual Meeting of Stockholders

To Be Held on June 20, 2024:

The Notice of 2024 Annual Meeting of Stockholders, Proxy Statement and 2023 Annual Report on Form 10-K

are available at the following website: www.proxyvote.com.

By Order of Our Board of Directors,

 

 

LOGO

Wendell Taylor,

Chief Corporation Counsel, Secretary

225 Binney Street

Cambridge, Massachusetts 02142

April  , 2024

This Notice of 2024 Annual Meeting of Stockholders and Proxy Statement are first being sent to stockholders on or about April  , 2024.

Our 2023 Annual Report on Form 10-K is being sent with this Notice of 2024 Annual Meeting of Stockholders and Proxy Statement.


Table of Contents

Table of Contents

 

 

Table of Contents

 

 

Proxy Statement Summary

     1  

Proposal 1 – Election of Directors

     2  

Corporate Governance

     10  

Commitment to Stockholder Engagement

     10  

Board Leadership Structure

     11  

Process for Selecting Directors, Director Qualifications and Board Diversity

     11  

Board Succession Planning and Refreshment

     13  

Regular Board and Committee Evaluations

     14  

CEO and Management Succession Planning

     14  

Annual Elections and Majority Voting

     14  

Committees and Meetings

     15  

Board Risk Oversight

     16  

Compensation Risk Assessment

     17  

Director Compensation

     17  

Corporate Responsibility

     20  

Proposal 2 – Ratification of the Selection of Our Independent Registered Public Accounting Firm

     22  

Audit Committee Report

     23  

Audit and Other Fees

     24  

Policy on Pre-Approval of Audit and Non-Audit Services

     24  

Proposal 3 – Advisory Vote on Executive Compensation

     25  

Letter from the Chair of the CMDC

     26  

Compensation Discussion and Analysis

     27  

Stockholder Engagement and Responsiveness to 2023 Say on Pay Vote

     27  

Executive Summary of 2023 Achievements

     29  

Executive Compensation Philosophy

     30  

Compensation Elements

     30  

Compensation Mix

     31  

Our Named Executive Officers for 2023

     31  

2023 Base Salary

     31  

2023 Performance-Based Plans and Goal Setting

     32  

Performance Goals and Target Setting Process

     32  

Changes Implemented for 2024 STI Program

     33  

Changes Implemented for 2024 LTI Program

     39  

Roles and Responsibilities

     43  

External Market Competitiveness and Peer Group

     44  

Retirement Plans

     45  

Other Benefits

     45  

Post-Termination Compensation and Benefits

     46  

Stock Ownership Guidelines

     46  

Recoupment of Compensation

     46  

Insider Trading, Hedging and Pledging Policy Prohibitions

     46  

Tax-Deductibility of Compensation

     47  

Compensation Committee Report

     47  

Executive Compensation Tables

     48  

Summary Compensation Table

     48  

2023 Grants of Plan-Based Awards

     49  

Outstanding Equity Awards at 2023 Fiscal Year-End

     51  

2023 Option Exercises and Stock Vested

     52  

2023 Non-Qualified Deferred Compensation

     52  

Potential Payments Upon Termination or Change in Control

     53  

CEO Pay Ratio

     56  

Pay for Performance

     57  

Proposal 4 – Amendment of the Amended and Restated Certificate of Incorporation, as amended, to add an Officer Exculpation Provision

     60  

Proposal 5 – Approval of Biogen Inc. 2024 Omnibus Plan

     62  

Proposal 6 – Approval of Biogen Inc. 2024 Employee Stock Purchase Plan

     67  

Stock Ownership

     70  

Information About the Meeting

     72  

Miscellaneous

     79  

Other Stockholder Communications

     80  

Incorporation by Reference

     80  

Copies of Annual Meeting Materials

     81  

Manner and Cost of Proxy Solicitation

     81  

Appendix A – GAAP to non-GAAP Reconciliation

     A-1  

Appendix B – Certificate of Amendment of Amended and Restated Certificate of Incorporation, as amended

     B-1  

Appendix C – Biogen Inc. 2024 Omnibus Plan

     C-1  

Appendix D – Biogen Inc. 2024 Employee Stock Purchase Plan

     D-1  
 

 

LOGO  2024 Proxy Statement    


Table of Contents

Proxy Statement Summary

 

 

Proxy Statement Summary

 

 

This summary highlights important information you will find in this Proxy Statement. As it is only a summary, please review the complete Proxy Statement before you vote.

 

   
 

Annual Meeting Information

 

 
   

 

 

DATE:

  

 

Thursday, June 20, 2024

TIME:    9:00 a.m. Eastern Time
LOCATION:   

Online only at www.virtualshareholdermeeting.com/BIIB2024

 

You will not be able to attend the annual meeting in person.

RECORD DATE:

 

  

April 25, 2024

 

 

   
 

Voting Matters and Vote Recommendation

 

 
   

 

     

Matter

Management Proposals:

  

Our Board

Recommendation

  

Page Number

for more detail

     
Proposal 1—Election of Directors    FOR each nominee    

2

     

Proposal 2—Ratificationof the Selection of PwC as our Independent Registered Public Accounting  Firm

   FOR   

22

     
Proposal 3—Advisory Vote on Executive Compensation    FOR   

25

     

Proposal 4—Approvalof Amendment to our Amended and Restated Certificate of Incorporation, as Amended, to add an officer exculpation provision

   FOR   

60

     
Proposal 5-—Approval of the Biogen Inc. 2024 Omnibus Equity Plan    FOR   

62

     
Proposal 6-—Approval of the Biogen Inc. 2024 Employee Stock Purchase Plan    FOR   

67

 

   
 

How to Vote

 

 
   

 

Vote Right Away Through Advance Voting Methods      Vote During Meeting
          
LOGO   

Vote by Internet Using Your Computer

Go to www.proxyvote.com and enter the Control Number provided in your Notice, proxy card or voting instruction form.

 

     LOGO   

Vote During the Meeting

See Part 1 – “General Information About the Meeting” for details on how to vote during the Annual Meeting.

          
LOGO   

Vote by Telephone

Call 800-690-6903 or the number of your Notice, proxy card, voting instruction form. You will need the Control Number provided on your proxy card or voting instruction form.

 

       
          
LOGO   

Vote by Mail

Complete, sign and date the proxy card or voting instruction form and mail it in the accompanying pre-addressed envelope.

 

       

 

LOGO  2024 Proxy Statement    -1-


Table of Contents

Proposal 1 — Election of Directors

 

Proposal 1 — Election of Directors

We are asking our stockholders to elect the 9 director nominees listed below to serve a one-year term extending until our 2025 annual meeting of stockholders and until their successors are duly elected and qualified, unless they resign or are removed:

 

Caroline D. Dorsa    Susan K. Langer    Eric K. Rowinsky
Maria C. Freire    Jesus B. Mantas    Stephen A. Sherwin
William A. Hawkins    Monish Patolawala    Christopher A. Viehbacher

Our Board has nominated these 9 individuals based on its carefully considered judgment that the skills, contributions, background, diversity and experience of our nominees qualify them to serve on our Board. As described in detail below, our nominees have considerable professional and business expertise. We know of no reason why any nominee would be unable to accept nomination or election. All nominees have consented to be named in this Proxy Statement and to serve if elected.

To be elected, a director nominee must receive the affirmative vote of the majority of the votes cast. Abstentions and broker non-votes, if any, are not considered votes cast under our bylaws and will have no effect on the results of this vote. For additional information please see also “What vote is required to approve each proposal and how are votes counted?” on page 75. If any nominee is unable to serve on our Board, the stock represented by your proxy will be voted for the election of such other person as may be nominated by our Board or alternatively, the number of directors may be reduced accordingly by the Board. In addition, in compliance with all applicable state and federal laws and regulations, we will file an amended proxy statement and proxy card that, as applicable, (1) identifies the alternate nominee(s) and (2) discloses that such nominees have consented to being named in the revised proxy statement and to serve if elected.

 

Nominees to the Board Independent Age Director Since

Audit

Committee

Corporate
Governance
Committee

Compensation
and

Management

Development

Committee

             

Caroline D. Dorsa

64 2010

 

C

 

             

Maria C. Freire

69 2021

 

 

M
             

William A. Hawkins

70 2019 C M

 

             

Susan K. Langer

33 2023

 

 

 

             

Jesus B. Mantas

55 2019 M

 

C
             

Monish Patolawala

54 2024 M

 

 

             

Eric K. Rowinsky

67 2010

 

M M
             

Stephen A. Sherwin

75 2010 M

 

 

             

Christopher A. Viehbacher

 

64 2022

 

 

 

* Age and Committee memberships are as of April 8, 2024.

C – Chair; M – Member

 

LOGO  2024 Proxy Statement    -2-


Table of Contents

Proposal 1 — Election of Directors

 

Summary of Director Nominee Core Experiences and Skills

Our Board consists of a diverse group of highly qualified leaders in their respective fields. Many of our directors have extensive scientific and healthcare expertise relevant to our industry. Most of our directors have executive leadership experience at large companies and have gained significant and wide-ranging management experience (including strategic and financial planning, public company financial reporting, compliance, risk management, and leadership development). Many of our directors also have public company experience (serving as chief executive officers or chief financial officers, on boards of directors and board committees), and bring an understanding of corporate governance practices and trends and unique perspectives to the Board. The Board and the CGC believe the skills, contributions, background, diversity and experience of our directors provide us with a wide range of perspectives to effectively address our evolving needs and represent the best interests of our stockholders.

Our Board possesses a deep and broad set of skills and experiences that facilitate strong oversight and strategic direction for a pioneering biotechnology company.

The following chart summarizes the competencies of each director nominee. The details of each nominee’s competencies are included in each nominee’s biography.

 

                   
Key Skills and Experience   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO

Business Operations

Understanding of day-to-day operations enhances oversight of development, implementation and assessment of operating plans

                 

Commercial

Understanding of commercialization, go-to market model and investment strategy to support continuous revenue generation

     

 

           

 

   

 

 

Cybersecurity

Technology and information security knowledge enhances oversight of data management and privacy policies and processes

     

 

   

 

   

 

       

 

   

 

   

 

Drug Development

Expertise of drug development increases successful navigation of highly regulated market

   

 

     

 

     

 

   

 

     

Executive Leadership

Executive management experience includes thought and operational leaders who can advise on corporate strategy, values and culture

                 

Finance

Financial expertise provides oversight of financial statements and capital structure decisions

         

 

   

 

     

 

   

International Business

Global market expertise enhances oversight of strategy development and execution, supply chain and compliance across markets

         

 

       

 

   

 

 

Public Board Service

Corporate governance fluency ensures shareholder and stakeholders interests serve as input to discussions and informs Board decisions

         

 

   

 

   

 

     

Public Policy

Governmental and regulatory experience assures navigation of legal/ regulatory policies and procedures as well as stakeholder expectations

         

 

       

 

   

Scientific Research

Research experience ensures the appropriate balance between innovation and costs

   

 

     

 

   

 

   

 

   

 

       

 

The lack of a “” for a particular item does not mean that the director does not possess that qualification expertise or experience. Each of our Board members has experience and/or skills in the enumerated areas, however the “” indicates that a director has a particular strength in that area.

 

LOGO  2024 Proxy Statement    -3-


Table of Contents

Proposal 1 — Election of Directors

 

In compliance with The Nasdaq Stock Market’s (Nasdaq) Board Diversity Rule, the table below provides information about our Board members and nominees in 2024. Our 2023 proxy statement which was filed with the U.S. Securities and Exchange Commission (SEC) on April 28, 2023, includes our 2023 Board diversity matrix.

 

 
Board Diversity Matrix (April 12, 2024)
   

Total Number of Directors

  9
                   
     LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO

Part 1: Gender Identity

                   

Female

       

 

     

 

   

 

   

 

   

 

   

 

                   

Male

   

 

   

 

     

 

         
                   

Non-Binary

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

Part II: Demographic Background

                   

African American or Black

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

                   

Alaskan Native or Native American

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

                   

Asian

   

 

   

 

   

 

   

 

   

 

     

 

   

 

   

 

                   

Hispanic or Latinx

   

 

     

 

   

 

     

 

   

 

   

 

   

 

                   

Native Hawaiian or Pacific Islander

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

                   

White

     

 

     

 

   

 

   

 

     
                   

Two or More Races or Ethnicities

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

                   

LGBTQ+

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

                   

Did not Disclose Demographic Background

   

 

   

 

   

 

     

 

   

 

   

 

   

 

   

 

 

LOGO  2024 Proxy Statement    -4-


Table of Contents

Proposal 1 — Election of Directors

 

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE NAMED NOMINEES. PROXIES WILL BE VOTED “FOR” THE ELECTION OF THE NOMINEES UNLESS OTHERWISE SPECIFIED.

Set forth below is biographical information for each nominee and a summary of the specific skills, contributions, background and experiences which led our Board to conclude that each nominee should serve on the Board at this time.

 

Caroline Dorsa, Independent Chair, fmr. Chief Financial Officer of Public Service Enterprise Group

   LOGO   

 

Director since 2010

Age 64

Board Committee

Corporate Governance (Chair)

 

Key Skills

 

•   Business Operations

 

•   Commercial

 

•   Cybersecurity

 

•   Executive Leadership

 

•   Finance

 

•   International Business

 

•   Public Board Service

 

•   Public Policy

 

 

Relevant Expertise

 

Ms. Dorsa has deep knowledge of the pharmaceutical industry as well as significant financial and accounting expertise. Her strategic perspective on the industry enhances the Board’s oversight of the company’s growth initiatives and reviews of both internal development projects and external opportunities.

 

Career Highlights

 

•   Executive Vice President (EVP) and Chief Financial Officer (CFO), Public Service Enterprise Group, Inc. (2009 – 2015)

 

•   Senior Vice President (SVP) of Global Human Health, Strategy and Integration, Merck & Co., Inc. (2008 – 2009)

 

•   SVP and CFO, Gilead Sciences, Inc. (2007 – 2008)

 

•   Various financial and operational positions at Merck & Co., Inc. including Vice President and Treasurer (1987 – 2007)

 

Other Public Company Boards

 

Current

 

•   Illumina, Inc. (since 2010)

 

•   Duke Energy Corporation (since 2021)

 

Prior

 

•   Intellia Therapeutics, Inc (2015 – 2023)

 

•   Goldman Sachs Funds (2016 – 2021)

 

•   Public Service Enterprise Group, Inc. (2003 – 2009)

 

Education

 

•   B.A. in History from Colgate University

 

•   M.B.A. in Finance and Accounting from Columbia University

 

Maria C. Freire, Ph.D., fmr. President and Executive Director, Foundation for the National Institutes of Health

   LOGO   

 

Director since 2021

Age 69

Board Committee

Compensation and Management Development

 

Key Skills

 

•   Business Operations

 

•   Drug Development

 

•   Executive Leadership

 

•   Finance

 

•   International Business

 

•   Public Board Service

 

•   Public Policy

 

•   Scientific Research

 

 

Relevant Expertise

 

Dr. Freire has significant knowledge and experience with respect to medical research, the pharmaceutical industry and government healthcare policymaking. Dr. Freire’s strong public policy and government experience vitally enhances the Board’s perspective of significant issues affecting the highly regulated life sciences industry.

 

Career Highlights

 

•   President and Executive Director, the Foundation for the National Institutes of Health (“NIH”) (2012 – 2021)

 

•   President and Director, Albert and Mary Lasker Foundation (2008 –2012)

 

•   President and CEO, Global Alliance for TB Drug Development (2001 –2008)

 

•   Director of the Office of Technology Transfer, NIH (1995 – 2001)

 

Other Public Company Boards

 

Current

 

•   Alexandria Real Estate Equities, Inc. (since 2012)

 

•   Exelixis, Inc. (since 2018)

 

Other Boards & Awards

 

•   Science Board of the FDA

 

•   World Health Organization Commission on Intellectual Property Rights, Innovation and Public Health, United Nations Secretary General’s High-Level Panel on Access to Medicines

 

•   Member, National Academy of Medicine and the Council on Foreign Relations

 

•   2017 Gold Stevie Award for “Woman of the Year,” the U.S. Department of Health and Human Services Secretary’s Award for Distinguished Service, the Arthur S. Fleming Award and the Bayh-Dole Award

 

Education

 

•   B.S. from the Universidad Peruana Cayetano Heredia (Lima, Peru)

 

•   Ph.D. in Biophysics from the University of Virginia

 

LOGO  2024 Proxy Statement    -5-


Table of Contents

Proposal 1 — Election of Directors

 

William A. Hawkins, fmr. Chairman and Chief Executive Officer, Medtronic, Inc.

   LOGO   

 

Director since 2019

Age 70

Board Committees

Audit (Chair)

Corporate Governance

 

Key Skills

 

•   Business Operations

 

•   Commercial

 

•   Executive Leadership

 

•   Finance

 

•   International Business

 

•   Public Board Service

 

•   Public Policy

 

 

Relevant Expertise

 

Mr. Hawkins has significant executive and board leadership experience in the healthcare industry both domestic and international. Mr. Hawkins’ unique perspective enhances the Board’s oversight of the company’s global strategic plans and implementation.

 

Career Highlights

 

•   Senior Advisor to EW Healthcare Partners, a life sciences private equity firm (since 2017)

 

•   President and CEO, Immucor, a global leader in transfusion and transplant medicine (2011 – 2015)

 

•   Chairman and CEO, Medtronic, Inc. (2002 – 2011)

 

•   President and CEO, Novoste Corporation, an interventional cardiology company (1998 – 2001)

 

Other Public Company Boards

 

Current

 

•   Chair, Bioventus, Inc. (since 2016)

 

•   MiMedx Group, Inc. (since 2020)

 

Prior

 

•   Avanos Medical, Inc. (2015 – 2021)

 

•   Thoratec Corporation (2011 – 2015)

 

Other Boards & Awards

 

•   Director, Virtue Labs, Enterra, Lacuna Medical, Cirtec Medical Corp. and Baebies, Inc., all private life companies

 

•   Duke University Health System

 

•   Member, National Academy of Engineering, and AIMBE College of Fellows

 

Education

 

•   B.Sc. in Electrical and Biomedical Engineering (dual) from Duke University

 

•   M.B.A. from the University of Virginia’s Darden School of Business

 

Susan Langer, President & Chief Business Officer at Souffle Therapeutics

   LOGO   

 

Director since 2023

Age 33

 

Key Skills

 

•   Business Operations

 

•   Commercial

 

•   Drug Development

 

•   Executive Leadership

 

 

Relevant Expertise

 

Ms. Langer has significant experience and knowledge of the biopharmaceutical industry and deep connections within the biotechnology, start-up and venture capital ecosystems. That expertise, coupled with her knowledge of the company’s operations, enhances the Board’s ability to nimbly evaluate growth opportunities as well as long-term investments.

 

Career Highlights

 

•   President and Chief Business Officer, Souffle Therapeutics (since 2021)

 

•   Founding President, Kojin Therapeutics (2020 – 2021)

 

•   Chief Business Officer, Paratus Sciences (2021 – 2023)

 

•   Director, Guava Partners (since 2021)

 

•   Venture Partner, Old Silver VC LLC (2020 – 2023)

 

•   Head of Corporate Strategy and other roles at Biogen (2013 – 2019)

 

Other Public Company Boards

 

•   None

 

Education

 

•   B.A. in Science & Technology Studies from Cornell University

 

LOGO  2024 Proxy Statement    -6-


Table of Contents

Proposal 1 — Election of Directors

 

Jesus B. Mantas, Global Managing Partner, IBM Business Transformation Services

   LOGO   

 

Director since 2019

Age 55

Board Committees

Compensation and Management Development (Chair)

Audit

 

Key Skills

 

•   Business Operations

 

•   Commercial

 

•   Cybersecurity

 

•   Executive Leadership

 

•   International Business

 

•   Public Policy

 

 

Relevant Expertise

 

Mr. Mantas has over 30 years of experience in global business operations, information technology, data science and artificial intelligence gained through global strategy and operating management roles across Europe, North America and Latin America. His expertise enhances Board perspectives on global operating scale, business strategy, culture change, managing risks, applying technology to improve business performance, seeking diversity and developing talent and succession plans in multi-cultural environments.

 

Career Highlights

 

•   Global Managing Partner, IBM Global Business Services (since 2022)

 

•   Senior roles at IBM (2002 – 2022) including:

  Global Managing Partner, Strategy, Innovation and Corporate Development

  Global Managing Partner, IBM Business Consulting

  General Manager, IBM Business Process Outsourcing

  Managing Partner and General Manager, IBM Global Business Services Latin America

  Senior Partner, IBM Global Business Services

 

•   Partner, High Technology Practice, PricewaterhouseCoopers Consulting (1997 – 2002)

 

•   Adjunct Professor, University of California Irvine, Graduate School of Management, Paul Merage School of Business (1997 – 2001)

 

•   Second Lieutenant, Air Force of Spain (1993)

 

Other Public Company Boards

 

•   None

 

Education

 

•   B.S. in Telecommunications – Software Engineering, Universidad Politécnica de Madrid (Madrid, Spain)

 

•   Degree in Business Administration, Universidad Politécnica de Madrid (Madrid, Spain)

 

•   Corporate Governance – Harvard Business School

 

Monish Patolawala, President and Chief Financial Officer at 3M Company

   LOGO   

 

Director since 2024

Age 54

Board Committee

Audit

 

Key Skills

 

•   Business Operations

 

•   Commercial

 

•   Cybersecurity

 

•   Executive Leadership

 

•   Finance

 

•   International Business

 

•   Public Policy

 

 

Relevant Expertise

 

Mr. Patolawala has more than 25 years of experience leading financial operations and business for global industrial and healthcare companies. At 3M, he leads finance, enterprise strategy, information technology, global service centers, country prioritization and governance, and the company’s project management office, which includes responsibility for the execution of the spin-off of 3M’s health care business.

 

Career Highlights

 

•   President and CFO, 3M Company (since 2020)

 

•   CFO of GE Healthcare (2015 – 2020)

 

•   Variety of roles of increasing responsibility at General Electric Company (1994 – 2020)

 

Other Public Company Boards

 

•   None

 

Certifications

 

•   Chartered Accountant from the Institute of Chartered Accountants of India

 

•   Cost and Works Accountant from the Institute of Cost and Works Accountants of India

 

Education

 

•   B. Com from St. Joseph’s College of Commerce (Bangalore, India)

 

LOGO  2024 Proxy Statement    -7-


Table of Contents

Proposal 1 — Election of Directors

 

Eric K. Rowinsky, M.D., President of Inspirna

   LOGO   

 

Director since 2010

Age 67

Board Committees

Compensation and Management Development

Corporate Governance

 

Key Skills

 

•   Business Operations

 

•   Drug Development

 

•   Executive Leadership

 

•   Public Board Service

 

•   Scientific Research

 

 

Relevant Expertise

 

Dr. Rowinsky has extensive research and drug development and regulatory experience and broad scientific and medical knowledge. His experience leading teams that have registered more than twelve novel therapies for patients with advanced cancers enhances the Board’s oversight of the company’s research and development (R&D) and quest to pioneer breakthrough innovations within the highly regulated life sciences industry.

 

Career Highlights

 

•   President, Inspirna, a privately held life science company (since 2015), and Executive Chairman (2016 – 2021)

 

•   Chief Medical Officer, Hummingbird Biotherapeutics (2020 – 2023)

 

•   Chief Scientific Officer, Clearpath Development, Inc. (2016 – 2021)

 

•   Head of R&D, Chief Medical Officer, Stemline Therapeutics (2012 – 2015)

 

•   CEO, Primrose Therapeutics, Inc., a biotech start-up (2010 – 2011)

 

•   Chief Medical Officer, and Executive Vice President, ImClone Systems (2005-2010)

 

Other Public Company Boards

 

Current

 

•   Fortress Biotech Inc. (2010 to June 2024) (not standing for reelection at the annual meeting in May 2024)

 

•   Purple Biotech Ltd. (since 2019)

 

•   Verastem, Inc. (since 2017)

 

Prior

 

•   BIND Therapeutics, Inc. (2014 – 2016)

 

Other Boards & Awards

 

•   Director of the Institute, and Director of Clinical Research, Cancer Therapy & Research Center’s Institute for Drug Development (1996 – 2004)

 

•   Associate Professor of Oncology at the Johns Hopkins School of Medicine (1988 – 1996)

 

•   Director, Scientific Counselors of the National Cancer Institute Level Panel on Access to Medicines

 

Education

 

•   B.A. in Liberal Arts, from New York University

 

•   M.D. from Vanderbilt University School of Medicine

 

Stephen A. Sherwin, M.D., Clinical Professor of Medicine at UCSF

   LOGO   

 

Director since 2010

Age 75

Board Committee Audit

 

Key Skills

 

•   Business Operations

 

•   Drug Development

 

•   Executive Leadership

 

•   Finance

 

•   Public Board Service

 

•   Public Policy

 

•   Scientific Research

 

 

Relevant Expertise

 

Dr. Sherwin has extensive knowledge of the life sciences industry through his advisory work in life sciences, and patient care and teaching in his specialty of medical oncology, as well as founding and leading life sciences companies. Dr. Sherwin’s more than 30 years of industry experience significantly enhances Board oversight and development of the company’s strategy and execution.

 

Career Highlights

 

•   Clinical Professor of Medicine at the University of California, San Francisco (since 2010)

 

•   Volunteer Attending Physician in Hematology-Oncology at the Zuckerberg San Francisco General Hospital (since 2010)

 

•   Advisory partner, Third Rock Ventures, LLC (since 2016)

 

•   Chairman and Co-founder, Ceregene, a life sciences company acquired by Sangamo Biosciences (2001 – 2013)

 

•   Chairman and Co-founder, Abgenix, Inc, an antibody company acquired by Amgen (1996 – 2006)

 

•   CEO, Cell Genesys, Inc., a life sciences company merged with BioSante Pharmaceuticals, Inc. (now ANI Pharmaceuticals, Inc.) (1994 – 2009)

 

Other Public Company Boards

 

Current

 

•   Neurocrine Biosciences Inc. (since 1999)

 

Prior

 

•   Epiphany Technology Acquisition Corp. (2022 to 2023)

 

•   Bios Special Acquisition Corporation (2021 to 2023)

 

•   Aduro Biotech, Inc (2015 – 2020)

 

Education

 

•   B.A., in Biology from Yale University

 

•   M.D. from Harvard Medical School

 

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Table of Contents

Proposal 1 — Election of Directors

 

Christopher A. Viehbacher, President and Chief Executive Officer, Biogen Inc.

   LOGO   

 

Director since 2022

Age 64

 

Key Skills

 

•   Business Operations

 

•   Commercial

 

•   Drug Development

 

•   Executive Leadership

 

•   Finance

 

•   International Business

 

•   Public Board Service

 

•   Public Policy

 

 

Relevant Expertise

 

Mr. Viehbacher has extensive international experience in both large pharmaceutical companies and entrepreneurial biotech companies. Mr. Viehbacher brings a keen understanding of the complexities involved in running a multibillion-dollar global pharmaceutical business as well as an appreciation for the value of innovation.

 

Career Highlights

 

•   President and CEO, Biogen Inc. (since 2022)

 

•   Managing Partner, Gurnet Point Capital, a Boston based investment fund (2015 – 2022)

 

•   Global CEO of Sanofi S.A. (2008 – 2014)

 

•   Various roles, GlaxoSmithKline (1984 – 2008)

 

Other Public Company Boards

 

Prior

 

•   Pure Tech plc (2015 – 2023)

 

•   Axcella Health (2015 – 2019)

 

Other Boards & Awards

 

•   Trustee, Northeastern University

 

•   Board of Fellows, Stanford Medical School

 

Education

 

•   B. Comm. from Queen’s University (Kingston, Canada)

 

 
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NAMED NOMINEES.

 

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Table of Contents

Corporate Governance

 

Corporate Governance

Corporate Governance Highlights

We believe that our Board’s primary functions are to appoint, evaluate and hold management accountable, oversee strategy and strategic direction, oversee key strategic, operational and compliance risks and work to achieve optimal capital allocation such that long-term stockholder value is maximized. We are committed to the highest standards of ethics, business integrity and corporate governance, which we believe will help ensure that our company is managed for the long-term benefit of our stockholders. Our governance practices are designed to establish and preserve accountability for our Board and management, provide a structure that allows our Board to set objectives and monitor performance, facilitate the efficient use of resources and enhance stockholder value.

Our Board’s Corporate Governance Principles are reviewed at least annually by the CGC and are amended from time to time in response to changing regulatory requirements, evolving governance practices and trends and issues raised by our stockholders and stakeholders. Our Board members are also subject our Code of Business Conduct. Our Corporate Governance Principles and Code of Business Conduct may be found at our website, www.biogen.com, under the “Corporate Governance” subsection of the “Investors” section of the website.

How our corporate governance practices align with our key governance principles is set forth in the table below.

 

   

 Governance

 Principles

  

Corporate Governance Practice

 

   
Accountability to Stockholders     Our common stock is our only class of stock, with one vote per share
    Our directors are annually elected by majority vote, and we have a director resignation policy
    Stockholders have the right to call special meetings and act by written consent
    Proxy access Bylaw (3%, 3 years, nominees for up to 25% of our Board)
   
Board Independence     8 of our 9 directors qualify as independent directors under the independence requirements of Nasdaq
    Our Board is led by an independent Chair
    Our independent directors regularly meet without management present (executive sessions) that are led by our Chair and have open access to management and third-party advisors
    All of our Board committees are 100% independent
   
Board Composition     5 of our independent directors joined since 2019 (including 3 racially/ethnically diverse directors and 2 female directors)
    33% of our Board are female and 3 of our Board members are racially/ethnically diverse
    Policy that seeks to maintain an average tenure of 10 years or less for independent directors
    Current average independent director tenure of approximately 7 years
   
Board Policies and Practices     Annual anonymous Board and Committee evaluation process
    Annual independent director evaluation of CEO
    Enterprise Risk Management (ERM) program overseen by the Board
    Annual Compensation Risk analysis overseen by the CMDC
    Board oversight of ESG matters
   
Risk Mitigation and Alignment of Interests     Significant stock ownership requirements for officers and directors
    Compensation recoupment in equity and annual bonus plan
    Comprehensive Code of Business Conduct and Corporate Governance Principles
    Related Person Transaction Policy and Conflicts of Interest and Outside Activities Policy

Commitment to Stockholder Engagement

We value the views of our stockholders and feedback received serves as a valuable input to Board and committee discussions and informs actions taken to increase stockholder value. To support maintaining an open dialogue with our stockholders, the CGC leads our Board’s efforts on director-stockholder engagement and directs discussions with stockholders to the appropriate Board and committee members. To demonstrate our commitment to stockholder engagement, we have adopted a policy that on an annual basis, our independent directors, led by our Chair of the CGC, will seek to engage with our largest 30 stockholders to better understand their perspectives on a variety of issues, including business strategy, capital allocation, corporate governance, executive compensation, sustainability and our corporate social responsibility initiatives.

 

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Table of Contents

Corporate Governance

 

In addition, our CFO and investor relations group lead our management team in investor meetings throughout the year to discuss our business, our strategy and financial results. Increasingly, these discussions also include ESG related topics. Meetings included in-person and virtual meetings, telephone and webcast conferences.

 

  

 

 

 Stockholder Outreach following 

each Annual Meeting as % of
Common Stock Outstanding

     
  

 

  2023   2022   2021
     

 Offered engagement to stockholders representing approximately

  65%   64%   51%
     

 Had one-on-one discussions with stockholders representing approximately

  47%   35%   42%
     

 Independent directors participated in calls with stockholders representing approximately

  47%   35%   32%

We remain committed to investing time with our stockholders to increase transparency and better understand our stockholder base and their perspectives. For additional information please see also “Our Track Record of Responsiveness to Stockholder Feedback” on page i for more details regarding our stockholder engagement regarding executive compensation and governance following the 2023 Annual Meeting.

Board Leadership Structure

Independent Chair Leadership

The Board regularly reviews its leadership structure to evaluate whether it continues to best serve the needs of the company and its stockholders. We believe that having an independent Chair promotes a greater role for the independent directors in the oversight of the company, including overseeing the strategic direction of the company and oversight of material risks facing the company. Additionally, it also encourages active participation by the independent directors in the work of our Board, enhances our Board’s role of representing stockholders’ interests and improves our Board’s ability to supervise and evaluate our CEO and other executive officers. Further, separation of the Chair and CEO roles allows our CEO to focus on operating and managing the Company while leveraging our independent Chair’s experience and perspectives. After the 2023 Annual Meeting, Ms. Dorsa, assumed the role as Chair of our Board. Among other responsibilities, our Chair:

 

   

presides at meetings of our Board, executive sessions of our independent directors and our annual meetings of stockholders;

 

   

reviews and assists in setting the agenda and schedule for our Board meetings in collaboration with our CEO;

 

   

advises the committee chairs in fulfilling their responsibilities to our Board;

 

   

recommends to our Board the retention of any advisors who report directly to our Board;

 

   

serves as a liaison for stockholder communications with our Board;

 

   

leads the process of evaluating our CEO; and

 

   

discharges such other responsibilities as our Board may assign from time to time.

Director Independence

All of our directors and nominees for director, other than Mr. Viehbacher, our President and CEO, satisfy the Nasdaq independence requirements, as determined by our Board. All members of all of our standing committees are independent directors. In addition, all members of our Audit Committee and the CMDC meet the additional SEC and Nasdaq independence and experience requirements applicable specifically to audit and compensation committee members, respectively, and determined by our Board.

Process for Selecting Directors, Director Qualifications and Board Diversity

Board Composition

Board composition is one of the most critical areas of focus for the Board. Reflecting our Board’s commitment to refreshment, five of our independent directors have joined since 2019. Our CGC regularly screens and recommends candidates for nomination by the full Board and, among other things, considers feedback received during the annual Board and committee evaluation process, stockholder feedback, our qualification guidelines and skills matrix, director commitment levels and diversity. Candidates who are recommended by stockholders will be considered in the same manner as other candidates. For all potential candidates, our CGC will consider all factors it deems relevant, including at a minimum those listed below in the subsection entitled “Director Qualifications, Standards and Board Diversity.” Director nominations are recommended by our CGC to our Board and must be approved by the Board. For more information on the process for nomination of directors by stockholders please see “Stockholder Proposals” on page 79.

 

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Corporate Governance

 

Director Qualifications and Board Diversity

 

 

General Qualifications and Standards. Our Corporate Governance Principles and Code of Business Conduct provide that directors should possess the highest personal and professional ethics and integrity, understand and be aligned with our core values and be committed to representing the long-term interests of our stockholders. Our directors must also be inquisitive and objective and have practical wisdom and mature judgment.

 

 

Director Term and Resignation. Our Board does not believe that arbitrary term limits on directors’ service are appropriate. In 2023 we amended our Corporate Governance Principles to eliminate our age-based resignation policy and instituted a policy that seeks to maintain an average tenure of 10 years or less for independent directors. Our Corporate Governance Principles provide that directors should offer their resignation in the event of any material change in principal employment or principal occupation. Additionally, if a director has a material change in principal employment or principal occupation after their most recent election to the Board by stockholders, the Board will decide whether it is in the best interests of the Company and our stockholders to accept or reject the irrevocable resignation previously submitted by such director.

 

 

Diversity. Our Corporate Governance Principles include the Board’s position on board diversity. Our Board believes that diverse experience and personal diversity, including gender, national origin, LGBTQ+ and racial and ethnic diversity, is a benefit to our Board as a whole and is key to representing the interests of stockholders effectively. As set forth in our Corporate Governance Principles, we endeavor to have a Board that collectively represents diverse experience at strategic and policy-making levels in business, government, education, healthcare, science and technology and the international arena, and collectively has knowledge and expertise in relevant functional areas such as accounting and finance, risk management and compliance, strategic and business planning, corporate governance, cybersecurity, human resources, marketing, commercial and research and development. While we do not have a formal policy on requiring women and minorities to be included in the initial pool of candidates, the CGC is responsible for considering a diverse pool of candidates of potential board nominees to the Board and believes that directors should be selected so the Board maintains its diverse composition. Consistent with our Corporate Governance Principles, in selecting nominees to our Board, our CGC considers the diversity of skills and experience that a potential nominee possesses and the extent to which such diversity would enhance the perspectives, backgrounds, knowledge and experience of our Board as a whole. Over the last five years, we have appointed four racially or ethnically diverse directors and two female directors. Maintaining the diversity of our board will be a key consideration as we embark on any board refreshment process.

 

 

Director Orientation and Continuing Education. We provide orientation for new directors and provide ongoing education to directors by providing them with materials and briefing sessions on subjects that we believe will assist them in discharging their duties. In addition to periodic educational sessions, our Board has one meeting a year that is principally dedicated to board education. We also make director education program information available to directors on a regular basis, encourage directors to attend director education programs and reimburse the costs of attending such programs.

Our Nomination Processes

Our CGC leads the Board’s process for identifying, evaluating, and selecting directors. Our CGC uses a variety of methods to help identify potential Board candidates and considers an assessment of current Board skills, background, diversity and experience to evaluate candidates for recommendation to the Board for approval. The CGC assesses potential candidates based on their history of achievement, the breadth of their business experiences, whether they bring specific skills or expertise in areas that the CGC has identified as desired and whether they possess personal attributes and experiences that will contribute to the sound functioning of our Board. Diversity is also a key consideration in our nomination and succession planning processes.

 

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Table of Contents

Corporate Governance

 

Changes to our Nominating Process in 2023

After the 2023 Annual Meeting, the CGC, led by its new Chair, adopted an enhanced Board nomination process. The goal was to create a process that (i) leverages the Board’s succession and refreshment practices to identify skills and expertise needed on the Board, (ii) uses an independent search firm to support the CGC in conducting a broad search through a diverse pool of potential candidates and to help evaluate and conduct diligence on potential candidates and (iii) provides stockholders with greater transparency on the nomination process and its objectives. The enhanced process comprises the following:

 

 

Nomination Process

 

   
Step 1   Assessment of Board Needs
   Determine what skills and expertise may be needed on the Board
   
Step 2   Create Candidate Pool
   Independent Search Firms
   Independent director recommendations
   Stockholder recommendations
   
Step 3      

Comprehensive Candidate Review

  Potential candidates are comprehensively reviewed and the subject of discussion during CGC meetings. During these meetings, the CGC assess candidates on the basis of their skills, background, diversity and experience and their expected contribution to Board

  Based on these meetings, the CGC identifies candidate(s) for nomination to the Board
 

The candidate(s) recommended by the CGC is available to be interviewed by all Board members and evaluated at CGC meetings open to all directors

  During these meetings, directors assess candidates on the basis of their skills, background, diversity and experience and their expected contribution to Board

  Simultaneous due diligence is conducted, including soliciting feedback from other directors and checking references

   
Step 4   Recommendation to the Board
   The CGC presents qualified candidates to the Board for review and approval

Fall 2023 Nomination Process in Action

After the 2023 Annual Meeting and as part of its ongoing review of Board succession plans and refreshment, the CGC evaluated the size of the Board, committee composition, and skills and experience present on the Board. As a result of this review, the CGC determined that the Board should seek a candidate with a broad range of skills, including but not limited to possessing the skills and experience to qualify as an audit committee financial expert. The CGC hired an independent search firm to identify, evaluate and conduct due diligence on potential candidates. A pool of candidates was submitted to the CGC to evaluate. The CGC nominated and the Board, after all directors had the opportunity to interview him, approved the nomination of Monish Patolawala, an executive with more than more than 25 years of experience leading industrial and healthcare businesses.

Board Succession Planning and Refreshment

The CGC continually reviews our Board’s composition to identify the skills needed on our Board to help oversee our company both in the near term and into the future. Ongoing strategic board succession planning, along with our average board tenure policy, are designed to ensure that the Board continues to maintain an appropriate mix of skills, backgrounds, diversity and experiences to provide fresh perspectives and effective oversight and guidance to management.

The CGC evaluates what additional skills and expertise may be needed near term and in the future based on the company’s strategy and potential director departures. The CGC then compares those skills to those of the current directors to identify additional skills and experiences that would be beneficial to the Board. The CGC then targets the identification and recruitment of individuals who have the qualifications identified through this process.

Our Board does not believe that arbitrary term limits on directors’ service are appropriate. In 2023, in consideration of a number of factors, including stockholder feedback, we eliminated our bright-line age-based offer of resignation policy and instituted a policy that seeks to maintain an average tenure of 10 years or less for independent directors. We believe this new policy promotes better succession planning by balancing the benefit of fresh perspectives that new directors may bring with the institutional knowledge and experience that longer-tenured directors possess.

 

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Table of Contents

Corporate Governance

 

Board Committee Succession Planning and Refreshment

The Board, led by the CGC, reviews and determines the composition of committees and appoints the committee chairs. Through periodic committee refreshment, we balance the benefits derived from continuity and depth of experience with those gained from fresh perspectives and enhancements to our directors’ understanding of different aspects of our business. In 2023, we appointed new Chairs on all committees and changed the composition of each committee.

Regular Board and Committee Evaluations

Board and committee evaluations play a critical role supporting the effective functioning of our Board. Through evaluations, our directors review where they believe our Board functions effectively and, importantly, areas where our Board thinks there may be opportunities for improvement, including through Board and committee refreshment.

 

   

Formal evaluation Process. The CGC oversees the Board evaluation process. In consultation with the Chair of the Board and the committee Chairs, a framework for evaluation is established, including a review of topics for evaluation that are incorporated in the evaluation forms. Form anonymous evaluations are collected, compiled and distributed in advance of the scheduled discussion. The evaluations include open-ended questions and space for candid commentary. All comments are unattributed, included verbatim and shared with the full Board and applicable committee. Each committee Chair reports to the full Board on these assessments for their review and discussion. Policies, practices and the composition of our Board and its committees are modified as appropriate, informed by evaluation findings.

 

   

Ongoing Feedback. Our directors provide real-time feedback throughout the year outside of the formal evaluation process and have open access to management and third-party advisors. Additionally, executive sessions of independent directors (without management present) are scheduled for each quarterly regular Board and every committee meeting to identify any issues and assess whether meeting objectives were satisfied.

 

   

Evaluation Process Update. After the 2023 Annual Meeting, the CGC, led by its new Chair initiated a review of our self-evaluation process with the aim of improving the effectiveness of the process, benchmark current practices against other companies and assess possible improvements. To facilitate this review a third-party consultant will assist in this review and redesign by providing different perspectives and expertise. We anticipate this evaluation and redesign to conclude in 2024 and will inform our self-evaluation process going forward.

CEO and Management Succession Planning

Our Board strives to ensure that we have the right management talent to pursue our strategies successfully. The entire Board is involved in the critical aspects of the CEO succession planning process, including establishing selection criteria that reflect our business strategies, identifying and evaluating potential candidates. Succession is regularly discussed with the CEO as well as without the CEO present in executive sessions of the Board.

The Board meets with and assesses development plans for internal potential CEO successors to address identified gaps in skills and attributes. This occurs through various means, including informal meetings, presentations to the Board and committees, attendance at Board meetings and the comprehensive annual talent review. The Board also oversees management’s succession planning for other executive positions. Our Board and CMDC meets at least once a year to conduct a detailed talent review which includes a review of the company’s talent strategies, leadership pipeline and succession plans for key executive positions. We believe that maintaining our strong culture and adhering to our principles will ensure that we attract, retain and develop the right talent to lead the company and successfully execute our corporate strategy in the future.

Annual Elections and Majority Voting

Directors are elected by a majority vote of the votes cast in uncontested elections and by a plurality of votes cast in contested elections. In addition, following their appointment to the Board by our Board or election by stockholders, directors must submit an irrevocable resignation that will be effective upon (1) the failure to receive the required number of votes for reelection at the next annual meeting of stockholders at which they face reelection and (2) acceptance of such resignation by our Board. If an incumbent director fails to receive the number of votes required for reelection, our Board (excluding the director in question) will, within 90 days after certification of the election results, decide whether to accept the director’s resignation, taking into account such factors as it deems relevant. Such factors may include the stated reasons why stockholders voted against such director’s reelection, the qualifications of the director and whether accepting the resignation would cause the company to fail to meet any applicable listing standards or would violate state or federal law. Our Board will promptly disclose its decision in a filing with the SEC.

 

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Corporate Governance

 

Committees and Meetings

Our Board met 13 times in 2023. Our Board also has three standing committees, the Audit Committee, CMDC and CGC. The principal functions of each committee, the committee composition as of December 31, 2023, and the number of committee meetings held in 2023 are described in the table below. The Chair of each committee periodically reports to our Board on committee deliberations and decisions. The Board maintains charters of each of our committees and the charters are reviewed at least annually. The charters for each of each of the committees are posted on our website, www.biogen.com, under the “Corporate Governance” subsection of the “Investors” section of the website. Our Corporate Governance Principles, together with our committee charters, Bylaws, Amended and Restated Certification of Incorporation (Certificate of Incorporation) and Code of Business Conduct, comprise our governance framework.

 

 Committee       Function    2023 Members  

Meetings 

in 2023

Audit

 

Assists our Board in its oversight of:

  the integrity of our financial statements;

  our accounting and financial reporting processes;

  the independence, qualifications and performance of our independent registered public accounting firm;

  the effectiveness of the Company’s internal control over financial reporting;

  our global tax strategy, compliance and tax audit processes;

  our internal audit and corporate compliance functions;

  our financial strategy, policies and practices;

  the adequacy of the company’s information technology and cybersecurity; and

  the adequacy and effectiveness of the Company’s insurance programs.

 

Our Audit Committee has the sole authority and direct responsibility for the appointment, compensation, retention, evaluation and oversight of the work of our independent registered public accounting firm.

 

  

William A. Hawkins† (Chair)

Caroline Dorsa†*

Jesus B. Mantas

Stephen A. Sherwin†

  7 

Compensation and Management Development

 

Assists our Board with oversight of executive compensation and management development, including:

  recommending to our Board the compensation for our CEO and approving the compensation for our other executive officers;

  administration of our short- and long-term incentive plans;

  reviewing executive and senior management development programs and succession plans; and

  recommending to our Board the compensation of our non-employee directors.

 

  

Jesus B. Mantas (Chair)

Maria C. Freire

Eric K. Rowinsky

  7 

Corporate Governance

 

Assists our Board oversight of Corporate Governance Principles, including:

•  identifying qualified nominees to our Board and its committees;

•  selecting, evaluating and recommending Board nominees to stand for election at the annual meeting of stockholders and fill vacancies as they arise;

•  overseeing the Corporate Governance Principles and Code of Business Conduct and its application to Board members;

•  overseeing the Board and committee evaluation process; and

•  our lobbying priorities and activities, including associations with certain trade and/or legislative organizations.

 

  

Caroline Dorsa (Chair)

William A. Hawkins

Eric K. Rowinsky

  4 

Determined by our Board to be an audit committee financial expert. Mr. Patolawala, who joined the Board and Audit Committee on January 1, 2024, was determined by our Board to be an audit committee financial expert.

*

Departed the Audit Committee effective January 1, 2024.

 

 

Attendance at Board and Committee Meetings. Each of our director nominees attended all meetings of our Board and the committees on which they served.

 

 

Executive Sessions. Under our Corporate Governance Principles, the independent directors of our Board are required to meet without management present, which we refer to as executive session, at least four times each year and may also meet without management present at such other times as determined by our Chair or if requested by at least two other directors. In 2023 the independent directors of our Board met without management present 5 times. Each committee of our Board also had numerous executive sessions throughout the year.

 

 

Attendance at Stockholder Meeting. We expect all of our directors and director nominees to attend our annual meetings of stockholders. All directors who were nominees for election as directors at the 2023 Annual Meeting attended the 2023 Annual Meeting.

 

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Corporate Governance

 

The Board’s Role in Risk Oversight

Our Board believes that a fundamental part of risk management is understanding the risks that we face, monitoring these risks and adopting appropriate controls and mitigation of such risks. Our Board and its committees are responsible for “reviewing the company’s risk framework and governance and management’s exercise of its responsibility to assess, monitor and manage the company’s significant risk exposures.” Our Board oversees an enterprise-wide approach to risk management, which is designed to support execution of our strategy and achievement of the company’s objectives to improve long-term operational and financial performance and enhance stockholder value.

We have a company-wide ERM program to identify, mitigate and monitor enterprise level risks that may affect our ability to achieve the company’s objectives. The ERM program is overseen by our ERM Committee, a cross-functional group of the business leaders representing all of the company’s key business functions. On an ongoing basis, we evaluate the greatest risks to our business, their underlying risk drivers and the associated mitigation activities and controls.

We believe that the areas of risk that are fundamental to the success of our enterprise and rise to enterprise-level risks include, but are not limited to, those set forth in the risk factors section of our periodic SEC filings, including risks associated with product development, patient safety, product quality, patient supply, value (which includes pricing) and access, commercialization, business development, as well as protecting our assets (physical, financial, intellectual property, and information, including cybersecurity), all of which are managed by senior executive management reporting directly to the CEO. The enterprise-level risks are overseen by the Board and the appropriate Board committee. To facilitate this oversight, the Board receives regular risk reporting from senior management, including an annual detailed review of the ERM program and key enterprise-level and emerging risks. Additionally, emerging risks that do not rise to the level of enterprise-level risks are assessed and actively managed and monitored.

In determining the allocation of risk oversight responsibilities, our Board and its committees generally oversee material risks within their identified areas of concern. Our Board and each of its committees meet regularly with management to ensure that management is exercising its responsibility to identify relevant risks and is adequately assessing, monitoring and taking appropriate action to mitigate these risks. In the event a committee receives a report from members of management on areas of material risk to the company, the Chair of the relevant committee, assisted by management where appropriate, reports on the discussion to the full Board at the next Board meeting. This enables our Board and its committees to coordinate their oversight of risk and identify risk interrelationships.

Our independent Chair of the Board promotes effective communication and consideration of matters presenting significant risks to the Company through her role in developing our Board meeting agendas, advising committee chairs, chairing independent director sessions and facilitating communications between independent directors and our CEO.

A summary of the primary areas of risk oversight responsibility of our Board and each of its committees is set forth below:

 

 

 Board or

 Committee    

 

 

  Primary Area of Risk Oversight

Board

 

  Corporate and commercial strategy and execution, pricing and reimbursement, competition, reputational, ESG and other material risks

  Research and development activities, clinical development, drug safety and intellectual property

  Material government and other investigations and litigation

  Risk governance framework and infrastructure designed to identify, assess, manage and monitor the company’s material risks

  Risk management policies, guidelines and practices implemented by company management

 

Audit

 

  Financial, accounting, disclosure, corporate compliance, distributors, insurance, capital, credit, anti-bribery and anti-corruption matters, supply chain, and other risks reviewed in its oversight of the internal audit and corporate compliance functions

  Compliance with the Code of Business Conduct

  Information technology, artificial intelligence, privacy and cybersecurity risks

 

Compensation and Management Development

 

  Workforce matters, including harassment and retaliation

  Compensation policies and practices, including whether such policies and practices balance risk-taking and rewards in an appropriate manner as discussed further below

 

Corporate Governance

 

  Corporate governance and Board and Committee succession

  Compliance with Corporate Governance Principles and Code of Business Conduct

  Director independence, lobbying activities, potential conflicts of interest and related party transactions involving directors and executive officers

 

 

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Corporate Governance

 

Compensation Risk Assessment

The Compensation Discussion and Analysis (CD&A) section of this Proxy Statement describes our compensation policies, programs and practices for our named executive officers. Our goal setting, performance assessment and compensation decision-making processes described in the CD&A generally apply to all employees. We offer our employees the opportunity to participate in either our annual bonus plan or a sales incentive compensation plan. Generally, no employee is eligible to participate in both plans at the same time. Our annual bonus plan has the same company performance goals, payout levels (as a percentage of target) and administrative provisions for all participants globally, regardless of the participant’s job level, location or function in the company. Additionally, our LTI program provides different forms of awards based upon an employee’s level but is otherwise consistent throughout the company.

In the CD&A, we describe the risk-mitigation controls that govern our executive compensation programs. These controls include our CMDC’s review and approval of the design, goals and payouts under our annual bonus plan and LTI program and each executive officer’s compensation (or, in the case of our CEO’s compensation, a recommendation of that compensation to our Board for its approval). In addition, we review the processes, controls and design of our sales incentive compensation plans.

Our CMDC, working with its independent compensation consultant, also conducts an annual assessment of potential risks related to our compensation policies, programs and practices. Among other factors, this risk assessment considers the form of compensation (i.e., award type, fixed versus variable and short-term versus long-term), pay alignment, performance measures and goals, payout maximums, vesting periods and CMDC oversight and independence. This assessment is focused on (1) having an appropriate balance in our program structure to mitigate compensation-related risk with cash versus equity-based compensation, short-term versus long-term measurement and financial versus non-financial goals; and (2) policies and practices to mitigate compensation-related risk including recoupment of compensation, stock ownership guidelines, equity administration rules and insider-trading and hedging prohibitions.

Based on our assessment, we believe that, through a combination of risk-mitigating features and incentives guided by relevant market practices and company-wide goals, our compensation policies, programs and practices do not create risks that are reasonably likely to have a material adverse effect on the company.

 

 

 

 

Director Compensation

This section describes our compensation program for our non-employee directors and shows the compensation paid to or earned by our non-employee directors during 2023. Mr. Viehbacher, our President and CEO, did not receive any additional compensation for his service on our Board.

The CMDC has the authority to evaluate and make recommendations to our Board regarding director compensation.

 

   

The CMDC conducts this evaluation periodically by reviewing our director compensation practices against the practices of an appropriate peer group and the CMDC has the authority to retain consultants to advise on director compensation matters, including in support of the CMDC’s periodic review of director compensation practices. No executive officer has any role in determining or recommending the form or amount of director compensation.

 

   

No changes to director compensation were made in 2023.

Retainers and Expenses

The following table presents the annual retainers for all non-employee members of our Board in effect in 2023:

 

     

 

 Retainers

 

               

 Annual Board Retainer

   $ 125,000              

 Annual Retainers (in addition to Annual Board Retainer):

     

Independent Chair of the Board

   $ 75,000     

Audit Committee, CGC and CMDC Chair

   $ 30,000     

Audit Committee, CGC and CMDC Members (other than Chair)

 

   $

 

15,000

 

 

 

  

Our non-employee directors may defer all or part of their cash compensation under our Voluntary Board of Directors Savings Plan, which is similar to our Supplemental Savings Plan described in the narrative preceding the “2023 Non-Qualified Deferred Compensation” table in Part 6 – Executive Compensation Matters of this Proxy Statement, but without any company matching contributions. If a non-employee director chooses to defer compensation under our Voluntary Board of Directors Savings Plan, his or her notional account under the plan will periodically be credited with amounts of deemed investment earnings as if the deferred

 

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Corporate Governance

 

compensation was actually invested in the notional investment(s) selected by the director or in a default investment if the director does not make a selection. These notional investment options include mutual funds similar to those available under our 401(k) plan as well as a fixed rate option which earns a rate of return determined each year by the company’s retirement committee. For 2023 non-employee director deferrals notionally invested in the fixed rate option, this rate of return was set at 5%. Deferrals notionally invested in the fixed rate option continue to be credited with the rate of return that was in effect during the year of deferral.

Non-employee directors are also reimbursed for actual expenses incurred in attending meetings of our Board and any of its committees as well as service to our Board or any of its committees that is unrelated to such meetings.

Equity Awards

Awards Under Our Non-Employee Directors Equity Plan

Our non-employee directors receive awards under our 2006 Non-Employee Directors Equity Plan (the Non-Employee Directors Equity Plan). The Non-Employee Directors Equity Plan was initially approved by our stockholders at our 2006 annual meeting of stockholders. In 2015 our stockholders approved an amendment to extend the term of the plan until June 10, 2025.

General Provisions of the Non-Employee Directors Equity Plan

Non-employee directors receive an annual award under the Non-Employee Directors Equity Plan effective on the date of each annual meeting of stockholders (or a pro rata award upon election other than at an annual meeting of stockholders). Under the Non-Employee Directors Equity Plan, a maximum of 17,500 shares of our common stock (or 30,000 shares of our common stock for the non-employee Chair of the Board) may be granted to a non-employee director pursuant to such annual awards each calendar year. Annual awards vest on the earlier of (i) the one-year anniversary of the date of grant or over such longer period and in such increments as our CMDC may otherwise determine or (ii) at the next annual meeting after grant of such annual award.

Awards to non-employee directors are recommended by our CMDC and approved by our Board, with the Chair recused from discussion and voting upon his or her own awards. Awards granted under the Non-Employee Directors Equity Plan are subject to accelerated vesting upon termination of a director’s service by reason of death, disability or retirement and upon a change in control (as such terms are defined in the Non-Employee Directors Equity Plan).

Awards During 2023

In 2023 our CMDC recommended, and our Board approved, annual awards with a grant date fair value of approximately $270,000 for each non-employee director and an additional annual award with a grant date fair value of approximately $175,000 for the independent Chair. These annual awards were below the limits set forth in the Non-Employee Directors Equity Plan described above and were consistent with the awards made in 2022. The 2023 annual awards were made in the form of restricted stock units (RSUs) that vest on the earlier of (i) the first anniversary of the grant date or (ii) the next annual meeting, generally subject to the director’s continued service.

10b5-1 Trading Plans

Our non-employee directors must use pre-established trading plans to sell our common stock from their personal accounts. A trading plan may only be entered into during an open trading window and when the applicable director is not in possession of material non-public information about the company. We require a waiting period following the establishment of a trading plan before any trades may be executed. Our policy is designed to provide safeguards while allowing our non-employee directors to have an opportunity to realize the value intended by the company in granting equity-based awards.

Non-Employee Director Stock Ownership Guidelines

We maintain the following stock ownership guidelines for our non-employee directors:

 

 

 Position

 

  

 

 Stock Ownership Requirement1

 

  Non-Employee

  Chair

 

  

Number of shares equal in value to five times the total annual cash retainer for serving as

(i) non-employee Chair plus (ii) as a non-employee Board member

 

  Non-Employee

  Directors (excluding Chair)

  

Number of shares equal in value to five times the annual cash retainer for non-employee

Board members

 

(1)

Each non-employee director has five years from the date of initial election or appointment to meet the stock ownership requirement. As of December 31, 2023, all of our non-employee directors meet the stock ownership requirement or were still within the five-year period to meet such requirement.

 

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Corporate Governance

 

2023 Director Compensation

 

 Name

 

 (a)

  

Fees Earned or
Paid in Cash

 

(b)

  

Stock Awards(1)

 

(b)

  

All Other Compensation(2)

 

(c)

  

Total

 

(d)

   

 Alexander J. Denner(3)

   $77,500          $77,500       

 Caroline D. Dorsa

   $201,236    $444,896       $646,132  

 Maria C. Freire

   $140,000    $270,317    $2,582    $412,899  

 William A. Hawkins

   $155,412    $270,317       $425,729  

 William D. Jones(3)

   $77,500          $77,500  

 Susan K. Langer

   $64,217    $270,317       $334,534  

 Jesus B. Mantas

   $162,912    $270,317       $433,229  

 Richard C. Mulligan(3)

   $70,000          $70,000  

 Stelios Papadopoulos(3)

   $115,000       $25,000    $140,000  

 Eric K. Rowinsky

   $147,706    $270,317       $418,023  

 Stephen A. Sherwin

   $140,000    $270,317    $25,000    $435,317    

 

Notes to the 2023 Director Compensation Table

 

(1)

The amounts in column (b) represent the grant date fair value of RSU awards made in 2023 to non-employee directors under the Non-Employee Directors Equity Plan, as described in the narrative preceding this table. These RSUs are scheduled to vest in full and be settled in stock at the earlier of the 2024 Annual Meeting or the one-year anniversary of the grant date, generally subject to continued service. Grant date fair values were computed in accordance with Accounting Standards Codification (ASC) 718, excluding the effect of estimated forfeitures, and determined by multiplying the number of RSUs awarded by the fair market value of the company’s common stock on the relevant grant date.

(2)

The amounts in column (c) represent matching contributions made in 2023 by the Biogen Foundation on behalf of the director pursuant to the terms of a matching gift program offered by the Biogen Foundation to all U.S. employees and non-employee directors of Biogen. Under the matching gift program, the Biogen Foundation matches gifts to eligible U.S.-based non-profit organizations, in accordance with the Biogen Foundation’s guidelines, up to an annual maximum per donor amount of $25,000 per calendar year and up to an aggregate program total of $1.5 million per calendar year.

(3)

Did not stand for reelection at the 2023 Annual Meeting.

Director Equity Awards Outstanding at 2023 Fiscal Year-End

The following table summarizes the equity awards that were outstanding as of December 31, 2023, for each of the non-employee directors serving as of December 31, 2023.

 

   

Stock Awards(1)

 

 Name  

 Number of Shares or Units of Stock 
 That Have Not Vested 

 Caroline D. Dorsa

  1,580

 Maria C. Freire

  960

 William A. Hawkins

  960

 Susan K. Langer

  960

 Jesus B. Mantas

  960

 Eric K. Rowinsky

  960

 Stephen A. Sherwin

  960
 

Notes to the Director Equity Awards Outstanding at 2023 Fiscal Year-End Table

 

(1)

Represents the number of RSUs awarded to non-employee directors in 2023 under the Non-Employee Directors Equity Plan, as described in the narrative preceding the “2023 Director Compensation” table above. These RSU awards are scheduled to vest in full and be settled in stock at the earlier of (i) the first anniversary of the grant date or (ii) the next annual meeting, generally subject to continued service.

 

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Corporate Governance

 

Corporate Responsibility

Culture and Essentials

To continue to build on our strong culture, we introduced the New Biogen Way, aiming to maintain our spirit of innovation and patient-centricity while advancing a more entrepreneurial business mindset and results-focused approach. The New Biogen Way describes the mission and behaviors – pioneer, think broadly, drive results, ethical and inclusive – that provide the foundation for long-term success.

Corporate Responsibility

Consistent with our aim to return to sustainable growth, we have evolved and refined our Corporate Responsibility strategy and programs to deliver meaningful results in the areas where we can have the greatest impact. Read Biogen’s Corporate Responsibility Report, which will be posted on our website, www.biogen.com, under the “Reporting and Principles” subsection of the “Responsibility” section of the website, to understand our ESG work, priorities and achievements in detail. References to Biogen’s Corporate Responsibility Report are for informational purposes only and neither our Corporate Responsibility Report nor the other information on our website is incorporated by reference into this proxy statement. Our 2023 highlights across four key pillars include:

 

       

ACCESS & HEALTH EQUITY 

 

 

WORKFORCE & DE&I

 

 

COMMUNITY IMPACT 

 

 

ENVIRONMENT

 

•  89% of clinical trials on track to deliver race and ethnicity targets for enrollment that reflect the epidemiology of the diseases

•  35% increase in patients with access to QALSODY through our EAPs

•  SPINRAZA is now available in 70 countries, including 22 low- and middle-income countries

 

•  #33 on Just Capital’s JUST 100

•  81% of participating employee respondents in our annual pulse survey say they have a sense of purpose by doing meaningful work at our company

•  Fostered an employee base reflective of the broader workforce, with women in the role of Director or higher (global) at 48.6% and racial/ethnic representation in the role of Manager or higher (U.S.) at 31.2%

 

 

•  Our programs enabled employees globally to support causes important to them, logging more than 10,000 volunteer hours

•  $29.2 million in grants, medical grants, sponsorships, donations and in-kind contributions from our company, the Biogen Foundation and employee giving

•  More than 2,100 students participated in our Community Lab, supporting a more diverse talent
pipeline

 

•  Reduced total waste by 46% since 2019

•  100% of our labs are My Green Lab certified

•  Named to the Dow Jones Sustainability World Index for 11th time, receiving the distinction of Top 1% Standard & Poor Global Corporate Sustainability Assessment Scores

Access & Health Equity

We aim to advance equitable access to quality healthcare and medicines so people can live healthier, fuller lives. To advance that vision from our pipeline to our commercialization strategies and beyond, we focus on four key pillars: supporting increased access to healthcare and medicines, navigating the unique patient journey, bolstering the clinical research ecosystem, and engaging and collaborating with the community.

 

   

We executed a multi-channel strategy to drive clinical trial recruitment, partnering with community- and faith-based organizations to educate, empower and enable access for people from underrepresented communities so our studies are more reflective of disease epidemiology. Using the U.S. Clinical Trial Index, we mapped participant data against clinical trial sites to identify gaps, improve access and inform site selection for our studies being run in lupus, Alzheimer’s disease, Parkinson’s disease and multiple sclerosis (MS).

 

   

Our global access mechanisms for patients include EAPs, compassionate use, post-trial access and humanitarian access. In 2023, our EAPs were open in 42 countries. Additionally, SPINRAZA is now available in 70 countries, with our Humanitarian Access program in India continuing to treat patients.

 

   

We introduced ZURZUVAE For You in the U.S. to help people living with PPD. The program provides educational resources, helps people understand insurance coverage and navigate the prescription-fulfillment process. The program also includes financial assistance, such as a copay assistance program and product at no cost for eligible patients.

 

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Corporate Governance

 

Workforce & DE&I

We strive to provide rewarding opportunities for all employees, creating a more skilled and engaged workforce that allows them to achieve excellence. In 2023, a business-wide priority was to deepen our focus on employee engagement, inspiring colleagues across the company with our purpose, spirit of innovation and culture while building on our strengths with our results-oriented mindset. We also re-assessed our approach to DE&I to strive to build the diverse, high-performing team we need to deliver our business strategy.

 

   

In our annual pulse survey, 81% of participating employee respondents said they have a sense of purpose by doing meaningful work at our company, underscoring how deeply invested employees are in our values, culture and mission.

 

   

To address a highly competitive labor market, we examined our global benefits. Our assessment confirms we continue to remain competitive in terms of our comprehensive total rewards, with 93% of our affiliates consistent with our industry peers’ offerings. We also conducted an analysis to ensure our health plans remain affordable for our U.S. employees.

 

   

To provide rewarding growth opportunities, our company supports all employees with training and professional development opportunities, regular assessments of individual performance and efforts to promote internal mobility. We launched new development programs to provide training and assessment services in the areas of individual effectiveness, leadership and business execution, supplementing our already robust offerings.

Community Impact

Our company and the Biogen Foundation are committed to advancing better health by engaging our employees and collaborating with high-impact partners in local communities. In 2023, our company and Biogen Foundation provided more than $6.7 million worldwide in Foundation grants, corporate donations, in-kind contributions and employee matching gifts. The Biogen Foundation also powers employee impact, matching employee donations and supporting volunteering.

 

   

Caring Deeply for our communities is a core pillar of our culture. Employees volunteered more than 10,000 hours and contributed more than $3.3 million in donations with the Biogen Foundation match. For example, our company, the Biogen Foundation and our employees together provided relief for communities affected by disasters, including more than $450,000 in response to the earthquakes in Turkey and Syria.

 

   

We worked to advance better health by connecting high-need patients to quality care and by training new and diverse talent to build a more inclusive healthcare ecosystem. Through the Biogen Foundation, we also addressed social determinants of health with a special focus on food insecurity. Together with inspiring nonprofit organizations, we helped provide more than 750,000 meals to local families.

 

   

To reach and inspire the next generation of healthcare workers, our company and the Biogen Foundation worked with community partners and universities to reach thousands of traditionally underserved and under-represented students. Current programs and partnerships include: Massachusetts General Hospital; Duke University; Kenan Fellows; and historically black colleges and universities, including Morehouse School of Medicine, North Carolina Central University, Shaw University and Xavier University of Louisiana. Since its launch, our Community Lab, the nation’s first hands-on corporate science lab, has reached 64,000 middle- and high-school students in 40 countries.

Environment

Environmental and human health are deeply linked, with stakeholder expectations and regulatory requirements rapidly changing around multiple environmental issues. Our environmental strategy aims to ensure compliance, drive efficiency and reduce our impact through our areas of focus: responsible product development; sustainable operations; and by engaging suppliers.

 

   

From a 2019 baseline, we cut the total waste generated from our overall operations by 46%. Waste reduction enhances sustainability and can drive greater operating efficiency. Our team at our manufacturing facility at Solothurn, Switzerland also developed a comprehensive waste collection system that sorts 12 categories of waste for recycling.

 

   

Certified 100% of our labs through My Green Lab, a nonprofit program recognized by the United Nations Race to Zero campaign as the leading standard for laboratory sustainability. This reflects a commitment to continuous improvement across our labs in Europe, South America and the U.S.

 

   

We are evaluating more efficient alternatives to current internal operations as part of our end-of-life equipment asset program to progress towards our long-term goals to eliminate operational carbon emissions.

Biogen’s Corporate Responsibility Report provides more detail about our ESG work, priorities and achievements, which will be posted on our website, www.biogen.com, under the “Reporting and Principles” subsection of the “Responsibility” section of the website. References to Biogen’s Corporate Responsibility Report are for informational purposes only and neither our Corporate Responsibility Report nor the other information on our website is incorporated by reference into this proxy statement.

 

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Proposal 2 – Ratification of the Selection of Independent Registered Public Accountants

 

Proposal 2 – Ratification of the Selection of Our Independent Registered Public Accountants

Our Audit Committee is directly responsible for the appointment, compensation, retention, evaluation and oversight of the independent registered public accounting firm retained to audit our consolidated financial statements. Our Audit Committee has selected PricewaterhouseCoopers LLP (PwC) as our independent registered public accounting firm for the fiscal year ending December 31, 2024. PwC has served as our independent registered public accounting firm since 2003.

To assure continuing auditor independence, our Audit Committee periodically considers whether there should be a rotation of the independent registered public accounting firm. Further, in conjunction with the rotation of the auditing firm’s lead engagement partner required by applicable SEC rules, our Audit Committee and its Chair has in the past been, and in the future will be, directly involved in the selection of PwC’s new lead engagement partner. Our Audit Committee believes at this time that the continued retention of PwC to serve as our independent registered public accounting firm is in the best interest of Biogen and its stockholders.

The affirmative vote of a majority of the total number of votes having voting power present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal is required to ratify the selection of PwC as our independent registered public accounting firm. Abstentions will have the effect of votes against the proposal. Brokers generally have discretionary authority to vote on the ratification of the selection of our independent registered public accounting firm, thus we do not expect any broker non-votes on this proposal. Although stockholder approval of our Audit Committee’s selection of PwC is not required, our Board believes that it is a matter of good corporate practice to solicit stockholder ratification of this selection. If our stockholders do not ratify the selection of PwC as our independent registered public accounting firm, our Audit Committee will reconsider its selection. Even if the selection is ratified, our Audit Committee always has the ability to change the engagement of PwC if it considers that a change is in Biogen’s best interest. Representatives of PwC will participate in the Annual Meeting, have the opportunity to make a statement if they so desire and be available to respond to appropriate questions.

 

OUR BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RATIFICATION OF

THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2024.

 

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Proposal 2 – Ratification of the Selection of Independent Registered Public Accountants

 

Audit Committee Report

The Audit Committee’s role is to act on behalf of our Board in the oversight of Biogen’s financial reporting, internal control and audit functions. The roles and responsibilities of the Audit Committee are set forth in the written charter adopted by our Board, which is posted on our website, www.biogen.com, under the “Corporate Governance” subsection of the “Investors” section of the website. Management has primary responsibility for the financial statements and the reporting process, including the systems of internal control.

In fulfilling its oversight responsibilities, the Audit Committee, among other things:

 

 

Reviewed and discussed with management the audited consolidated financial statements contained in Biogen’s 2023 Annual Report on Form 10-K;

 

 

Discussed with PwC, Biogen’s independent registered public accounting firm, the overall scope and plans for the audit;

 

 

Met with PwC, with and without management present, to discuss the results of its examination, management’s response to any significant findings, its observations of Biogen’s internal control, the overall quality of Biogen’s financial reporting, the selection, application and disclosure of critical accounting policies, new accounting developments and accounting-related disclosures, the key accounting judgments and assumptions made in preparing the financial statements and whether the financial statements would have materially changed had different judgments and assumptions been made and other pertinent items related to Biogen’s accounting, internal control and financial reporting;

 

 

Discussed with representatives of Biogen’s corporate internal audit staff, with and without management present, their purpose, authority, audit plan and reports;

 

 

Reviewed and discussed with PwC the matters required by the Public Company Accounting Oversight Board and the SEC;

 

 

Discussed with PwC its independence from management and Biogen, including the written disclosures and letter concerning independence received from PwC under applicable requirements of the Public Company Accounting Oversight Board. The Audit Committee has determined that the provision of non-audit services to Biogen by PwC is compatible with its independence;

 

 

Provided oversight and advice to management in connection with Biogen’s system of internal control over financial reporting in response to the requirements set forth in Section 404 of the Sarbanes-Oxley Act of 2002 and related regulations. In connection with this oversight, the Audit Committee reviewed a report by management on the effectiveness of Biogen’s internal control over financial reporting; and

 

 

Reviewed PwC’s Report of Independent Registered Public Accounting Firm included in Biogen’s 2023 Annual Report on Form 10-K, related to its audit of the effectiveness of internal control over financial reporting.

In reliance on these reviews and discussions, the Audit Committee recommended to our Board that the audited consolidated financial statements be included in Biogen’s 2023 Annual Report on Form 10-K, for filing with the SEC.

The Audit Committee of our Board of Directors:

William Hawkins (Chair)

Jesus B. Mantas

Monish Patolawala

Stephen A. Sherwin, M.D.

 

 

 

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Proposal 2 – Ratification of the Selection of Independent Registered Public Accountants

 

Audit and Other Fees

The following table shows fees for professional audit services billed to us by PwC for the audit of our annual consolidated financial statements for the years ended December 31, 2023 and December 31, 2022, and fees billed to us by PwC for other services provided during 2023 and 2022:

 

 Fees

 (amounts in thousands)

       2023            2022      

 Audit fees*

   $6,675.0      $6,106.0  

 Audit-related fees

   116.0      55.0  

 Tax fees**

   598.0      706.9  

 All other fees

   496.0      421.0  

 Total

       $7,885.0              $7,288.9  

 

*

Audit fees for 2023 include fees related to audit procedures performed on our acquisition of Reata.

**

Includes tax compliance fees of approximately $196.0 thousand and $159.0 thousand in 2023 and 2022, respectively.

Audit fees are fees for the audit of our 2023 and 2022 consolidated financial statements included in our Annual Reports on Form 10-K, reviews of our condensed consolidated financial statements included in our Quarterly Reports on Form 10-Q, review of the consolidated financial statements incorporated by reference into our outstanding registration statements and statutory audit fees in overseas jurisdictions.

Audit-related fees are fees that principally relate to assurance and related services that are also performed by our independent registered public accounting firm. More specifically, these services include audits of employee benefit plan information that are not required by statute or regulation.

Tax fees are fees for tax compliance and planning services.

All other fees include accounting research software, information systems reviews not performed in connection with the audit, and other advisory and consulting services.

 

 

Policy on Pre-Approval of Audit and Non-Audit Services

Our Audit Committee has the sole authority to approve the scope of the audit and any audit-related services as well as all audit fees and terms. Our Audit Committee must pre-approve any audit and non-audit services provided by our independent registered public accounting firm. Our 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, Nasdaq requirements or Public Company Accounting Oversight Board rules. In assessing whether to approve the use of our independent registered public accounting firm to provide permitted non-audit services, our Audit Committee tries to minimize relationships that could appear to impair the objectivity of our independent registered public accounting firm. Our 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.

Our Audit Committee annually reviews and pre-approves the audit, audit-related, tax and other permissible non-audit services that can be provided by the independent registered public accounting firm. After the annual review, any proposed services exceeding pre-set levels or amounts, or additional services not previously approved requires separate pre-approval by our Audit Committee or the Chair of our Audit Committee. Any pre-approval decision made by the Chair of our Audit Committee is reported to our Audit Committee at the next regularly scheduled Audit Committee meeting. Our CFO and our Chief Accounting Officer can approve up to an additional $50,000 in the aggregate per calendar year for categories of services that our Audit Committee (or the Chair through its delegated authority) has pre-approved.

All of the services provided by PwC during 2023 and 2022 were pre-approved in accordance with this policy.

 

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Proposal 3 – Advisory Vote on Executive Compensation

 

Proposal 3 – Advisory Vote on Executive Compensation 

Our CD&A, which appears below, provides an overview of our 2023 compensation program, as well as a description of the compensation decisions that our CMDC and Board made with respect to the 2023 compensation of our NEOs. This year our CD&A also includes a discussion of the stockholder engagement we had in 2023 specifically related to executive compensation. Our Board is asking that stockholders cast a non-binding, advisory vote FOR the following resolution:

“RESOLVED, that the compensation paid to the company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the CD&A, compensation tables and narrative discussion, is hereby APPROVED.”

Because the Advisory Vote on Executive Compensation asks for a non-binding, advisory vote, there is no “required vote” that would constitute approval. Abstentions will have the effect of a vote against the proposal, and broker non-votes, if any, will not have any effect on the results of those deliberations. Although the vote you are being asked to cast is non-binding, we value the views of our stockholders, and our CMDC and our Board will consider the outcome of the vote when making future compensation decisions for our NEOs. As we describe in our CD&A, our executive compensation programs embody a strong pay-for-performance philosophy that supports our business strategy and aligns the interests of our executives with those of our stockholders. In particular, our executive compensation programs reward financial, strategic and operational performance, and the goals set under our incentive plans support the company’s short- and long-range plans. In addition, to discourage excessive risk taking, we maintain policies for stock ownership, and our equity and annual bonus incentive plans have provisions providing for the recoupment of compensation. We also cap payments under our annual bonus plan, and we generally require multi-year vesting periods for LTI awards.

 

OUR BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE

FOR THE APPROVAL OF THE RESOLUTION SET FORTH ABOVE.

 

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Proposal 3 – Advisory Vote on Executive Compensation

 

Letter from the Compensation and Management Development Committee (CMDC)

Dear Fellow Stockholders

In July 2023, we refreshed the membership of the CMDC. The Board appointed two new members to the CMDC, one of whom was also appointed Chair of the CMDC. The newly constituted committee conducted its annual review of our executive compensation programs to ensure that we continue to align executive compensation with the creation of value for our stockholders. Our program continues to focus on linking short-term compensation to the achievement of annual corporate goals articulated in Biogen’s corporate scorecard coupled with stock-based long-term incentives, tied to performance driven measurements.

An important part of this annual review is meeting with our stockholders to get their feedback on executive compensation. At the 2023 Annual Meeting of stockholders our Say on Pay proposal received approximately 69.5% support. The CMDC and the Board were disappointed with this level of support and initiated continued stockholder engagement to better understand stockholder concerns.

Following the 2023 Annual Meeting, our independent directors requested engagement calls with 40 stockholders representing approximately 65% of outstanding stock, including the 20 largest stockholders who voted against our Say on Pay proposal in 2023. Fifteen stockholders owning over 47% of our outstanding stock met with us, including seven stockholders who voted against our Say on Pay proposal. Our Chair of the Board and CGC, along with our CMDC Chair, together with several other independent directors, led substantive discussions with these stockholders.

Several stockholders asked us to enhance disclosure of certain elements of the program, particularly regarding how our chosen performance metrics link to our pay program. We also heard a preference for giving greater weight to performance-based equity in our LTI award program. Several stockholders advocated for including an operationally focused metric in addition to the existing use of rTSR for the performance-based equity awards under our LTI program, to provide a more balanced assessment of company performance.

You will see in this year’s CD&A that we have made several changes to our program and our disclosures, many of which were informed by, and are responsive to, the feedback we received from stockholders. In particular, we have simplified our short-term incentive measures, providing a clearer and more transparent framework that links short-term compensation with performance, as reflected in the expanded disclosure. We have increased the performance-based equity component to 60% of total long-term equity incentives, up from 50% in 2023. We have added the compound annual growth rate of our adjusted earnings per share as an operationally focused metric to further align long-term incentives with a key driver of stockholder value. Lastly, we have expanded the rTSR comparator group to better align with market practices and increase the level of objectivity of such rTSR comparator group. Encouraged by our stockholder interactions, we took each of these actions because we believe they will enhance the transparency and effectiveness of our executive compensation programs. We also believe that providing appropriate and ambitious goals will help ensure that Biogen remains focused on creating stockholder value.

As a committee, we want to thank you for your engagement on, and your continued support of, our executive compensation philosophy and programs. We look forward to continued dialogue with you.

Jesus B. Mantas (Chair)

Maria Freire

Eric Rowinsky

Compensation and Management Development Committee

 

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Compensation Discussion and Analysis

 

Stockholder Engagement and Responsiveness to 2023 Say on Pay Vote

Our Board values the views of our stockholders and other stakeholders, and we solicit input from them throughout the year. At the 2023 Annual Meeting of stockholders our Say on Pay proposal received 69.5% support. The CMDC and the Board were disappointed with this level of support and initiated continued stockholder engagement to better understand stockholder concerns. In line with past practice, we sought and received detailed feedback from our stockholders after the 2023 Annual Meeting. We received feedback on a range of topics including specific aspects of our business strategy, capital allocation, corporate governance, executive compensation and our ESG initiatives. The stockholder engagement calls were led by our Board and CGC Chair and attended by the Chairs of the CMDC and/or Audit Committee and/or other independent directors.

 

Stockholder Outreach Following the 2023 Annual Meeting

We reached out to our top 40 stockholders who collectively owned:

 

 

65%

of O/S Stock2

 

  

Which included 20 stockholders who voted Against 2023 Say on Pay

 

We had 15 discussions with stockholders who collectively owned:

 

 

47%

of O/S Stock2

 

  

Which included 7 stockholders who voted Against 2023 Say on Pay

 

Independent Directors, including our Board and CGC Chair, and Chairs of the CMDC and/or Audit Committee

 

  Participated in 100% of these calls

The feedback and perspectives received from stockholders during these meetings were shared with the Board and served as an input to discussions at the Board and its committees, and ultimately informed decisions we made and action we took, as well as resulting in enhanced disclosure.

 

 

2 

As of December 31, 2023.

 

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Compensation Discussion and Analysis

 

The table below provides a summary of the recent executive compensation-based feedback we received from stockholders, and how the Board incorporated the feedback into its actions and how these actions to protect and enhance stockholder value.

 

     

Stockholder Feedback

“What We Heard”

 

Actions Taken

“What We Did”

 

Impact of Action

“Why It Is Important”

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  Incentives should reward executives for company performance and align payouts with stockholder value creation  

92% of CEO 2024 pay and 83% of our current NEOs 2024 pay is linked to either performance against preset goals or stockholder value creation.

 

 

Supports continued focus on the company’s strategy

Supports alignment of interests between NEOs and stockholders

 

 

Most stockholders, with a few exceptions, noted they prefer performance-based equity be the majority of annual equity awards

 

  Our LTI program consists of PSUs and RSUs. For 2024, increased weighting of PSUs to comprise 60% of LTI equity grants compared to 50% in 2023.   Strengthens alignment of interests between NEOs and stockholders
  Many stockholders voiced that PSUs should contain additional performance metrics to provide a more balanced assessment of company performance.  

For 2024 LTI grants, added an operationally focused metric based on the compound annual growth rate of our adjusted EPS weighted at 50% of PSU performance.

Expanded our 2024 rTSR comparator group to better align with market practices while weighting rTSR at 50% of PSU performance.

  Better align incentive payouts with long-term company performance by providing a more balanced measurement of company performance
  Some stockholders voiced their preference for a simpler bonus plan framework, and that annual performance plan metrics should measure more than just financial performance, with pipeline metrics being commonly supported. There was mixed support for ESG metrics, and stockholders voiced support for continued market access expansion.  

The 2024 Annual Bonus Plan continues to go beyond financial performance measurement, including pipeline, health equity and DE&I metrics.

The 2024 Bonus Plan contains a simplified framework linking short-term compensation with performance.

The 2024 Bonus Plan’s ESG goal includes metrics focused on clinical trial diversity, expanding global market access for SMA patients, and workforce DE&I initiatives.

 

 

Aligns NEO focus on broad short-term goals which supports long-term performance

Annual bonus plan multiplier is based on company performance which is assessed against quantifiable preset goals focused on financial performance and pipeline value creation

 

 

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Compensation Discussion and Analysis

 

Executive Summary of 2023 Achievements

2023 was a year of transformation for Biogen as we added four approved first-in-class medicines to our portfolio while we worked to realign our cost structure, remain prudent in allocating stockholder capital and reprioritized our pipeline.

Significant achievements in 2023 include:

 

   

Approval of 3 transformative first-in-class therapies:

 

     

LEQEMBI, an anti-amyloid antibody for the treatment of Alzheimer’s disease, developed by us and our collaboration partner Eisai, was granted traditional approval in July 2023 by the FDA and subsequently CMS confirmed broad coverage of the treatment. LEQEMBI was also approved by the Pharmaceuticals and Medical Devices Agency (PDMA) in Japan in September 2023 and China in January 2024, respectively. As of February 2024, there were regulatory filings for LEQEMBI under review in 14 other markets.

 

     

ZURZUVAE, for PPD, developed by us and our collaboration partner Sage, was approved by the FDA in August 2023, becoming the first and only oral, once-daily, 14-day treatment that can provide rapid improvements in depressive symptoms by day 15 for women with PPD. ZURZUVAE for PPD became commercially available in the U.S. during the fourth quarter of 2023.

 

     

QALSODY, for the treatment of ALS in adults who have a mutation in the SOD1 gene, received accelerated approval by the FDA in April 2023. Continued approval for this indication may be contingent upon verification of clinical benefit in confirmatory trial(s).

 

   

We completed the acquisition of Reata in September 2023. As a result of this transaction, we acquired SKYCLARYS (omaveloxolone), the first and only drug approved by the FDA in the U.S. in February 2023 and by the European Commission in the E.U. in February 2024 for the treatment of Friedreich’s Ataxia in adults and adolescents aged 16 years and older, as well as other clinical and preclinical pipeline programs. U.S. SKYCLARYS revenue was $55.9 million in 2023.

 

   

We maintained our leadership in our SMA business despite increased competition against SPINRAZA. Although our full year 2023 global SPINRAZA revenue decreased 3% as compared to 2022, we believe that SPINRAZA will remain a foundation of care in the treatment of SMA.

 

   

We initiated and executed a program as we work to realign our cost-base to our revenue and reengineer our business. We implemented a Fit for Growth operating model that prioritizes decision-making, agility, accountability and cost savings. We expect to achieve approximately $1.0 billion in gross operating expense savings by the end of 2025. The Fit for Growth initiative will enable us to reinvest a portion of these savings into potential growth drivers, including new capabilities and future medicines.

Our CMDC considered all of these achievements, and challenges, as they navigated executive compensation decisions for 2023 not just for our executive officers, but for all of our employees. Our CMDC believes that our executive compensation program for 2023 is consistent with our compensation philosophies and principles described below and demonstrates our commitment to linking compensation to company performance and strategy.

 

 

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Refer to Appendix A for a reconciliation of non-GAAP measures.

 

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Compensation Discussion and Analysis

 

Executive Pay Structure Aligns with Compensation Philosophy

 

 
 Executive Compensation Philosophy

Our executive compensation philosophy is to reward executives for the creation of long-term stockholder value. We designed performance-based compensation that is competitive with our peer group to attract and retain extraordinary leaders who perform at high levels and succeed in a demanding business environment.

       
Mission Focused and
Business Driven
  Competitively
Advantageous
 

Performance

Differentiated

 

Ownership

Aligned

       
We emphasize the importance of achieving short-term goals while building and sustaining a foundation for long-term success in delivering meaningful and innovative therapies to patients   We benchmark against companies we compete with for talent and our compensation is designed to recruit, retain and motivate our leadership team to achieve their best for the company and our stockholders   We endeavor to align pay
outcomes with company and
individual performance and
reward our best performers for
exceeding expectations
  We provide equity to all of our employees to align their interest with our broader interest of creating long-term value for our stockholders

How Our Pay Practices Align with Our Philosophy

 

         
Practice   Mission Focused /
Business Driven
 

Competitively

Advantageous

  Performance
Differentiated
  Ownership
Aligned
         

Over 85% of NEO (excluding the CEO) total direct compensation is tied to performance driven measurements

       
         

Annual bonus and LTI plan are performance-based with payouts capped

         
         

LTI awards are linked to performance, subject to multi-year vesting periods, and designed to reward long-term performance

       
         

Competitive total pay opportunities relative to peer group and broader market in which we compete for talent

       
         

Annual risk assessment to ensure our compensation programs do not encourage excessive risk taking

           
         

Robust stock ownership, anti-hedging and pledging, and clawback policies

         
         

Stockholder feedback is a key input to Board and CMDC discussions and informs actions taken

       

Compensation Elements

Our CMDC determines the elements of compensation we provide to our executive officers (which includes our CEO, all EVPs and our Chief Accounting Officer). The elements of our executive compensation programs and their objectives are as follows:

 

Element   Objective(s)

Base Salary

 

  Provides a fixed level of compensation that is competitive with the external market and reflects each executive’s contributions, experience, skills, responsibilities, and potential to contribute to our future success.

Annual Bonus Plan

 

  Aligns short-term compensation with the annual goals of the company.

  Motivates and rewards the achievement of annual company and individual performance goals that support short- and long-term value creation.

Long-term Incentives

 

  Aligns executives’ interests with the long-term interests of our stockholders by linking the value of awards to increases in our stock price and the achievement of other key performance goals.

  Motivates and rewards the achievement of stock price and earnings growth, including those with a longer-term focus.

  Promotes executive retention and stock ownership and focuses executives on enhancing long-term stockholder value.

Benefits

 

  Promotes health and wellness.

  Provides financial protection in the event of disability or death.

  Provides tax-beneficial ways for executives to save towards their retirement and encourages savings through competitive employer matches to executives’ retirement savings.

 

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Compensation Discussion and Analysis

 

Compensation Mix

Our CMDC determines the general mix of the elements of our executive compensation programs. It does not target a specific mix of value for the compensation elements within these programs in either the program design or pay decisions. Rather, our CMDC reviews the mix of compensation elements to ensure an appropriate level of performance-based compensation is apportioned to short-term compensation opportunities and even more to long-term compensation opportunities to ensure alignment with our business goals, performance, and stockholder interests.

Additionally, our CMDC believes the greater the leadership responsibilities, the greater the potential impact an individual will have on Biogen’s future strategic direction. Therefore, for our executive officers, including our NEOs, a greater portion of their compensation is performance-based, with a particular emphasis on LTI awards.

Our Named Executive Officers for 2023

Our named executive officers are listed below.

 

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 Christopher A. Viehbacher

 President and Chief Executive Officer

   

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 Susan H. Alexander

 Chief Legal Officer

           

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 Michael R. McDonnell

 Chief Financial Officer

   

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 Rachid Izzar

 Head of Global Product Strategy & Commercialization

           

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 Nicole Murphy

 Head of Pharmaceutical Operations and Technology

       

Statement Regarding Mr. Viehbacher’s 2023 Compensation

Mr. Viehbacher joined Biogen in November 2022. As part of his initial employment arrangements, it was agreed that his salary arrangement and sign-on equity award would be in lieu of any additional salary adjustment and equity grants in 2023. As noted in our 2023 proxy statement, Mr. Viehbacher is next eligible for a salary adjustment and equity grants in 2024.

2023 Base Salary

In late 2022 in connection with the hiring of Mr. Viehbacher, our Board reviewed the base salaries of chief executive officers in our peer group. The Board used this information and considered Mr. Viehbacher’s compensation mix, capabilities, performance, future expected contributions and positioning relative to the peer group when setting his initial base salary. Because Mr. Viehbacher was hired in November 2022 shortly before our 2022 annual review cycle, no adjustment was made to his base salary in 2023, or any other elements of Mr. Viehbacher’s compensation.

Our CMDC undertook a similar review when approving the annual base salaries for our other NEOs, which positioned them, on average, at market median compared to persons with comparable jobs within our peer group, given the overall emphasis on other performance-based pay elements. The decision to increase base salaries for our applicable NEOs was made to remain market competitive.

 

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Compensation Discussion and Analysis

 

The annual base salary of each of our NEOs in 2023, compared to 2022, is as follows:

 

 Name     2023 Salary       2022 Salary       % Increase(1)  

C. Viehbacher

  $1,600,000     $1,600,000     —  

M. McDonnell

  $950,490     $905,229     5.0%  

S. Alexander

  $929,524     $885,261     5.0%  

R. Izzar

  $594,756     $563,750     5.5%  

N. Murphy

  $675,000     $615,000     9.8%  

(1) Percentage increase reflects the annual merit increase and, in the case of Ms. Murphy, also includes a market adjustment based on our CMDC’s review of peer group and survey data.

2023 Performance-Based Plans and Goal Setting

Performance Goals and Target Setting Process

In the first quarter of each year, our CMDC reviews and establishes the pay levels of each element of total compensation for our executive officers. Total compensation is comprised of base salary, annual cash bonus and LTI awards.

As part of this process, our CMDC reviews the mix of compensation elements to ensure that performance-based compensation is appropriately apportioned and aligns with our business goals and performance and the annual operating plan approved by our Board. In addition, the total compensation opportunity and mix of compensation elements for our executive officers are evaluated based on qualitative factors, such as individual, strategic and leadership achievements. Our CMDC considers these risks carefully when designing our executive compensation programs and believes that the use and weighting of multiple metrics and the use of quantitative and qualitative metrics can mitigate these risks and create appropriate incentives to focus on achievement of the company’s overall performance goals.

Our executive compensation programs place a significant emphasis on performance-based compensation.

We maintain a short-term incentive plan, known as our annual bonus plan, as well as an LTI plan.

For 2023, annual bonus plan awards granted to our NEOs were made under our 2023 Performance-Based Management Incentive Plan, and awards under our LTI plan were granted under our 2017 Omnibus Equity Plan.

Awards made under our annual bonus plan are directly tied to the achievement of our company performance goals, which are aligned with the company’s short- and long-term strategic plans, as well as individual performance goals.

In 2023, our CMDC determined that awards made under our LTI plan would incorporate a relative performance metric, comparing performance relative to a group of peer companies, as described below under “Long-Term Incentives”.

In setting our annual goals under our short- and long-term incentive plans, in addition to our internal forecasts, we consider analysts’ projections for our performance and the performance of companies in our peer group as well as broad economic and industry trends. We strive to establish challenging targets that result in payouts at or above target levels only when company performance warrants it. Our CMDC is responsible for reviewing and approving our metrics, goals, targets, and levels of payout (e.g., threshold, target and maximum) for our executive incentive compensation plans and awards and for reviewing and determining actual performance results at the end of the applicable performance period.

In setting and approving the performance goals for our executive officers and for the company under both the short- and long-term incentive plans, our CMDC also considers the alignment of such goals to our business plan, the degree of difficulty of attainment and the potential for the goals to encourage inappropriate risk-taking. Our CMDC has determined that the structures of our executive compensation programs do not put our patients, investors, or the company at any material risk.

Annual Bonus Plan

2023 Short-Term Incentive (STI) Program

Our annual bonus plan is a cash incentive plan that rewards near-term financial, strategic, and operational company performance, as well as individual performance. Our CMDC reviews the annual target bonus opportunities for each executive officer by position each year to ensure such opportunities remain competitive.

The 2023 target bonus opportunities for our NEOs were unchanged from their respective 2022 bonus targets, and the 2023 bonus target for Mr. Viehbacher was established in connection with his commencement of employment as our CEO in 2022.

 

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Compensation Discussion and Analysis

 

The target annual bonus opportunity as a percentage of year-end annual base salary for each of our NEOs in 2023 compared to 2022 was as follows:

 

 Name   2023 Target     2022 Target  

C. Viehbacher

  150%   150%

M. McDonnell

  80%   80%

S. Alexander

  80%   80%

N. Murphy

  75%   75%

R. Izzar

  75%   75%

2023 Annual Bonus Plan Design

Awards for our NEOs under our 2023 annual bonus plan were based on the achievement of company performance goals and individual performance goals.

At the beginning of 2023 our CMDC set multiple company performance goals for our 2023 annual bonus plan and a payout multiplier, which we refer to as the Company Multiplier, ranging from 0% to 150%. The Company Multiplier, subject to adjustment by our CMDC, was calculated based on the determination of the level of achievement of each goal and the weighting assigned to each goal, resulting in the determination of the total Company Multiplier applied in the bonus calculation shown below.

In addition, our 2023 annual bonus plan payouts were based on an assessment of each NEO’s individual performance, considering their achievement of pre-determined individual performance goals. Evaluating individual performance allows our CMDC (or our Board, in the case of our CEO) to increase or decrease each NEO’s bonus amount based on the NEO’s performance by applying an individual performance multiplier, ranging from 0% to 150%, which we refer to as the Individual Multiplier.

We determined the individual annual bonus payments for 2023 using the following calculation:

 

Base
Salary
  x    Target
Bonus
(%)
  x    Company Multiplier   x    Individual Multiplier

Our 2023 annual bonus plan provided that if the Company Multiplier was less than 50%, there would be no payout, regardless of individual performance, consistent with our pay-for-performance philosophy. Further, because the Individual Multiplier and the Company Multiplier each have a maximum of 150%, the combined multiplier result for each NEO could not exceed 225% of target.

2023 Company Performance Goals and Results

Company performance goals were established in the early part of 2023 with assigned weightings that reflected the company’s focus on attaining both financial and strategic goals, near term growth related to LEQEMBI and zuranolone, pipeline development and ESG goals.

The goals and weightings selected reflect the importance of linking reward opportunities to both near-term results and our progress in achieving longer-term goals.

The strategic performance goals selected in 2023 were designed to measure the achievement of our annual strategic priorities relating to our commercial opportunities and pipeline progress. Our financial performance goals were based on the company’s annual operating plan approved by our Board.

Changes Implemented for 2024 STI Program

 

As part of its review of the annual bonus program and aligned with stockholder feedback received, the CMDC has streamlined our 2024 annual bonus program to enhance not just the simplicity and transparency of the program, but also the alignment with our pay-for-performance philosophy. Changes for 2024 include:

 

  Enhancing the weighting of financial and pipeline metrics in the 2024 annual bonus scorecard,

  Simplifying the Operational and ESG metrics, and

  Increasing performance emphasis on targeted areas of focus including access, health equity and DE&I, the very areas of importance expressed by stockholders.

We expect these changes will strengthen the focus of executives as they drive the execution of our business strategy and strengthen alignment of executives’ interests with those of our stockholders.

 

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Compensation Discussion and Analysis

 

2023 Annual Bonus Plan Company Performance Targets and Results Table

Our CMDC established the company performance goals at the beginning of 2023 based on preliminary projections for 2023, including certain assumptions regarding the impact of continued TECFIDERA erosion in the U.S. market, increased pressure from generic fumarates in several E.U. markets, competitive pressure globally with respect to SPINRAZA, class erosion for interferons and ongoing pricing pressures for anti-TNFs in Europe and the erosion of our anti-CD20 profit share with Genentech due to the ongoing impact of RITUXAN biosimilars. Financial targets for 2023 were set below the financial targets and actual outcomes for 2022, primarily due to the continued impact of TECFIDERA generic entrants with deeply discounted prices both in the U.S. as well as generic fumarate entrants in certain E.U. markets and are tied directly to our performance-based on pre-established financial and operating performance goals designed to drive execution of our strategic priorities. Our near-term growth goals were focused on preparing for and executing launches for LEQEMBI and ZURZUVAE, both of which we viewed as important to our long-term strategy when these goals were set. Our pipeline development goals work to drive the advancement of high-quality assets through various phases of R&D and executing clinical trials in a timely manner. We believe tying our pipeline performance to executive pay is important in aligning executive and stockholder interests. Our ESG goals work to drive initiatives designed to increase patient access, lessen the environmental impact of our operations, and advance imperatives focused on developing our talent. Given the rigorous business planning review that accompanies the goal setting process, our CMDC believes that the goals were rigorous and appropriately difficult to attain.

 

Metric   Weight    Threshold    Target    Max    Achieved   Company 
Multiplier 

Financial Performance

Revenue

  33%   $9,235M   $9,721M   $10,311M   $9,675M(1)   95.3%

Non-GAAP diluted EPS

  33%   $15.01   $15.80   $18.00   $15.71(1)   94.3%

Near-Term Growth – LEQEMBI

Launch Readiness and Execution of LEQEMBI

  5%   Achievement   Above Goal(2)   117.0%

Near-Term Growth – ZURANOLONE

Launch Readiness and Execution of ZURANOLONE

  5%   Achievement   Above Goal(2)   123.3%

Pipeline Development

Build and Advance Total Pipeline:

  Improve Pipeline Value Creation while maximizing the potential to deliver meaningful medicines for patients

  19%   Achievement   At Goal(3)   100.0%

Environmental, Social, Governance

Execute on Critical ESG Strategy to Drive Access and Health Equity, DE&I, People Imperatives, and Environmental Initiatives:

  Clinical trial recruitment strategy

  Environmental initiatives

  Enterprise-wide DE&I and employee engagement advancements

  5%   Achievement   At Goal(4)   100.0%

Overall Annual Bonus Plan Multiplier

  Company Multiplier   98.6%*
    Whole Percent   99%
* Numbers may not recalculate due to rounding

Refer to Appendix A for relevant reconciliation of non-GAAP measures.

Notes to 2023 Annual Bonus Plan Company Performance Targets and Results Table

 

(1)

These financial measures were based on our publicly reported revenue of $9.8 billion and our publicly announced Non-GAAP diluted EPS of $14.72, as adjusted as follows: for purposes of our 2023 annual bonus plan, revenue was adjusted to 1) neutralize the effects of foreign exchange rate fluctuations; 2) remove SKYCLARYS product revenue; and 3) remove the impact of the change in our presentation of the commercialization expense incurred within the LEQEMBI collaboration. Beginning in the third quarter of 2023 Biogen presented its 50% share of all global pre- and post-commercialization sales & marketing expense for the LEQEMBI collaboration within SG&A expense and no longer presented the post-commercialization portion of these expenses as a reduction to revenue. Biogen’s 50% portion of LEQEMBI product revenue, net, and cost of sales, including royalties, continued to be classified as a component of revenue. Non-GAAP diluted EPS was further adjusted to 1) add $0.63 related to the impact of Reata’s operations for the fourth quarter of 2023; 2) add $0.35 related to the impact of the ENVISION study close out costs recorded in relation to our decision to discontinue the development and commercialization of ADUHELM; and 3) add $0.01 related to share repurchases in 2023 under our 2020 Share Repurchase Program to account for lower than forecasted share purchases during 2023.

 

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Compensation Discussion and Analysis

 

(2)

Our near-term growth goals for LEQEMBI and zuranolone were achieved above the targets set for these metrics, which included commercial supply readiness, patient access, international expansion, partnership health and other objectives critical for launch success.

(3)

The company continued to work to drive value creation through the achievement of key asset milestones. We achieved our target set for 2023 through the approvals of LEQEMBI, QALSODY and ZURZUVAE in various geographies as well as achieving clinical stage study recruitment ahead of baseline.

(4)

We achieved our key ESG goals at target. The company exceeded goals measuring health equity and access by recruiting diverse and representative clinical trial participants, executing country specific DE&I strategies to support recruitment in clinical trials and increasing global patient access. We were below target on goals measuring internal people imperatives. We exceeded goals focused on reducing the environmental impact of our operations.

Further detail on the company’s achievement of performance goals:

Financial Performance

 

1.

While we achieved over 99% of our revenue and EPS targets, this translated to a scorecard payout of 95.3% and 94.3%, respectively.

 

   

While we faced competitive revenue and EPS headwinds, we were able to slow the overall decline in revenue and EPS and worked to position the company for growth while maintaining a strategic and disciplined approach to capital allocation, striving to align our cost base with revenue, and advancing our environmental sustainability, social responsibility, and corporate governance objectives.

Operational Performance

 

2.

We exceeded our LEQEMBI launch readiness and execution goals including:

 

   

Ensured inventory readiness at launch, aligned on manufacturing cost reduction initiatives, and supported international filings and inspections for manufacturing facilities.

 

   

Aligned on international launch plan and measured access through reimbursement restrictions.

 

   

Measured partnership health through effective joint operating and governance teams.

 

3.

We exceeded our ZURANOLONE launch readiness and execution goals including:

 

   

Ensured inventory readiness at launch.

 

   

Established commercial structure along launch timelines, engaged with key medical experts, and secured favorable reimbursement for patients.

 

   

Worked to create long-term value through geographic expansion planning and furthered scientific understanding through data publications.

 

   

Measured partnership health through effective joint operating and governance teams.

 

4.

We have progressed our pipeline and met our development goals

 

   

Develop and Expand Portfolio—We made progress on key clinical studies and certain regulatory approvals in 2023.

 

   

Depression

 

     

ZURZUVAE was approved by the FDA for PPD.

 

   

ALS

 

     

QALSODY was given accelerated approval by the FDA.

 

   

Alzheimer’s Disease

 

     

LEQEMBI was approved by the FDA in the U.S. and the PDMA in Japan.

Environmental, Social, and Governance

 

5.

Collectively we met our people and ESG goals

 

   

Advanced our recruitment strategy of achieving clinical trials that reflect the epidemiology of the disease, opened trial sites in underserved geographies, executed country specific DE&I initiatives to ensure access to clinical trials, highlighted data generation in DE&I populations, and expanded market access for SMA patients.

 

   

Measured achievement against internal DE&I goals and other people imperatives.

 

   

Increased the number of green labs and measured the participation in our sustainable benefits and initiatives.

 

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Compensation Discussion and Analysis

 

2023 Individual Performance Goals and Results

The Individual Multiplier reflects each named executive officer’s overall individual performance rating that is determined as part of our performance assessment process. Each NEO’s Individual Multiplier is based on an evaluation of his or her overall performance and consideration of the achievement of individual goals established at the beginning of the year. Goals may be both quantitative and qualitative. For 2023 Mr. Viehbacher recommended to our CMDC an Individual Multiplier for each actively employed NEO (other than himself) based on his assessment of their individual contributions for the year. In addition, our CMDC reviews on a qualitative basis each NEO’s other contributions to the company and our business, leadership competencies and relative performance among all our executive officers in determining Individual Multipliers. In its evaluation, our CMDC assigned Individual Multipliers to our actively employed NEOs, other than Mr. Viehbacher, between 115% and 150% based on the accomplishments listed below. Our CMDC recommended, and our Board approved, Mr. Viehbacher’s bonus with an individual multiplier of 100% and company multiplier of 99%.

Christopher Viehbacher

In determining CEO performance, the Board balances both short term performance with long term stockholder value creation; and to determine 2023 CEO annual bonus, the Board considered the company financial results and the actions executed in the year to reposition the company’s portfolio and create future stockholder value.

Mr. Viehbacher has performed very well in his first year as CEO, realigning the company strategy and working to address the key strategic and leadership priorities with urgency. As articulated in the Company’s accomplishments above, the company achieved 99.5% of its revenue target and 99.4% of its EPS targets as set in the Annual Operating Plan. Financial performance in 2023 benefited from Mr. Viehbacher’s leadership in a context of challenging conditions in place prior to his arrival. He properly focused on strategic clarity, and on executing near term actions with the aim of increasing long-term stockholder value.

The Board believes that Mr. Viehbacher is focused on the right priorities to return Biogen to growth, and he is performing well in driving these: 1) Shifting focus and resources from MS to new growth areas; 2) Renewing efforts to grow SPINRAZA and VUMERITY; 3) Reducing and re-deploying the company cost base, which is expected to lead to gross cost savings of $1 billion by the end of 2025; 4) Focusing the R&D portfolio on value creating programs; and 5) Seeking and executing external growth opportunities.

Specifically, we note the following achievements on Mr. Viehbacher’s first year as CEO of Biogen:

 

 

Led the transformation of Biogen’s R&D pipeline to focus the portfolio on value creating programs and diversification across multiple unmet disease areas including immunology and rare diseases, in addition to neuroscience.

 

Launched three first in class therapies including LEQEMBI, ZURZUVAE and QALSODY, bringing new medicines to previously underserved patients while also advancing scientific breakthroughs, including the identification of a new biomarker in patients with ALS.

 

Executed the $7.3 billion acquisition of Reata, expanding Biogen’s rare disease portfolio and adding the first commercially approved treatment for Fredrich’s Ataxia to Biogen’s diverse portfolio.

 

Strengthened Biogen’s Executive Leadership team through the acquisition of new talent including the Head of Corporate Development, Head of Research, and the appointment of the Head of Development.

 

Significantly improved Biogen’s cost basis through the organization-wide Fit for Growth initiative, resulting in a simplified operating structure and expected gross cost savings of $1.0 billion by the end of 2025.

In summary, the Board believes that Mr. Viehbacher’s performance has substantively transformed the cost structure of the company, is driving the right actions on the portfolio, has improved internal and external relationships with key stakeholders, has strengthened Biogen’s Executive Committee, and is driving a culture of performance and accountability that should contribute to sustainable long-term stockholder value creation.

Michael McDonnell

 

Drove strong financial performance against objectives approved by our CMDC and contained in the company’s 2023 annual operating plan.

 

Improved working capital management and cash flow and helped advise on the portfolio transformation.

 

Implemented a transformative IT strategy which delivered long-term cost savings, improved operational efficiency, and enhanced data protection of Biogen assets.

 

Co-led implementation of the organization-wide Fit for Growth initiative, delivering a simplified operating structure and resulting in significant operating expense reductions, to better align Biogen’s cost basis and revenue stream and which is expected to result in $1.0 billion in gross savings by the end of 2025.

 

Through renewed investor relations strategy and leadership, improved interactions with investors, leading to transparent and productive dialogue.

 

Prudently allocated capital to support the company’s objectives while managing liquidity and shaping our capital strategy.

 

Significant involvement in the evaluation and acquisition of Reata, resulting in the expansion of Biogen’s commercial portfolio and revenue streams.

 

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Compensation Discussion and Analysis

 

Susan H. Alexander

 

Led our compliance with SEC disclosure requirements.

 

Provided strategic legal advice to support patent protection and appeals, regulatory issues and filing of therapeutic applications to regulatory bodies.

 

Supported Fit for Growth initiatives.

 

Partnered with many internal functions to support lecanemab and zuranolone initiatives before and after approval.

 

Provided essential advice, was involved in deal negotiation, and aided the execution of the Reata acquisition to strengthen Biogen’s portfolio.

 

Provided transaction and litigation support, including supporting key business development and regulatory matters.

Nicole Murphy

 

Exceeded annual operating plan (AOP) targets across all major areas of financial responsibility.

 

Exceeded overall manufacturing success rate target.

 

Oversaw regulatory and partner inspections to improve operational performance and quality.

 

Partnered with research and development to advance our pipeline and patient access to medicines.

 

Executed global strategies focused on reducing the environmental impact of our manufacturing operations.

 

Enabled supply and distribution readiness to support improved clinical patient supply, commercial patient supply and new launch readiness.

 

Ensured manufacturing of distributed product met all applicable quality standards to maintain functionality, efficacy, identity, strength, and purity of our products.

 

Supported Fit for Growth initiatives.

Rachid Izzar

 

Successfully led the transformation of Biogen’s Global Product Strategy and Commercialization (GPS&C) organization, Government Affairs, Value & Access and Corporate Affairs organizations, delivering an optimized global operating model designed to maximize Biogen’s global commercialization goals.

 

Executed successfully on LEQEMBI, ZURZUVAE, and SKYCLARYS initiatives.

 

Co-led implementation of the organization-wide Fit for Growth initiative, delivering a simplified operating structure and resulting in significant operating expense reductions, to better align Biogen’s cost basis and revenue stream and which is expected to result in $1.0 billion in gross savings by the end of 2025.

 

Contributed to Reata initial assessment and diligence, specifically assessment of the global commercial landscape in support of the acquisition, bringing SKYCLARYS into the rare disease franchise and strengthening Biogen’s portfolio.

2023 Annual Bonus Plan Awards

Our CMDC, except with respect to Mr. Viehbacher whose final bonus determinations were made by our Board, determined that the final bonus awards under our 2023 annual bonus plan were as follows:

 

Name   

 

Year-end

 

Salary

 

(A) x

 

  

 

Target

 

Bonus%

 

(B) x

 

  

 

Company

 

Multiplier

 

(C) x

 

  

 

Individual

 

Multiplier

 

(D) =

 

  

 

Bonus

 

Award

 

(E)

 

 C. Viehbacher

   $1,600,000    150%    99%    100%    $2,376,000

 M. McDonnell

   $950,490    80%    99%    150%    $1,129,183

 S. Alexander

   $929,524    80%    99%    115%    $846,611

 N. Murphy

   $675,000    75%    99%    135%    $676,603

 R. Izzar

   $594,756    75%    99%    130%    $574,088

 

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Compensation Discussion and Analysis

 

Long-Term Incentives

2023 LTI Program

Below is a summary of the types of annual LTI awards granted to our NEOs (with the exception of Mr. Viehbacher who was not eligible for LTI grants) for 2023.

 

 

Terms

 

 

Performance Stock Units

 

 

Restricted Stock Units

     

 Proportion of

 Annual Target Grant

  50%   50%
     

 Performance

 Period(s)

  3 years
(2023-2025)
  n/a
     

 Metrics & Weightings

  Relative Total Stockholder Return: 100%   n/a
     

 Threshold /

 Maximum Payout

 (% of Target Award)

  25% / 200%   n/a
     

 Vesting

  3-Year Cliff Vesting   Annual Ratable Vesting over 3 years (1/3 per year)

All annual LTI awards granted to our executive officers are variable and designed to reward long-term company performance.

Our LTI program for our executive officers for 2023 consisted of PSUs and RSUs, with the annual LTI total target grant date value of awards being split evenly between PSUs and RSUs (assuming target performance). The PSUs granted to our executive officers are performance-based and settled in our common stock. The RSUs granted to our executive officers are time-based and settled in our common stock. The performance conditions applicable to these PSUs are described in further detail below.

Our annual LTI target grant values are determined based on an executive’s individual performance, potential future contributions and market competitiveness as well as other factors. In determining the LTI target grant value for a year, our CMDC reviews LTI awards made by companies in our peer group and, in certain circumstances, the broader market, and reviews the total compensation level of our executive officers against that of companies in our peer group and, in certain circumstances, the broader market. In general, we place a heavier weight on LTI awards in our executive compensation program to better align the interests of our executives with those of our stockholders. On average, target LTI grant values for our NEOs position their total compensation at or around the median values of our peer group in cases where there are comparable positions at the peer companies.

We have an established annual LTI grant practice where LTI grants are made following the completion of our internal performance reviews of our executive officers as well as our external market review of equity practices of our peer group and the broader market, including data from the Willis Towers Watson Pharmaceutical and Health Sciences Executive Compensation survey (Willis Towers Watson Survey) described later in this document. Since 2004, we have made our annual LTI grants in February of each year generally following our annual earnings release.

From time to time, we also grant time-based RSUs to recognize extraordinary contributions to the company or for transition or retention purposes.

In 2023, the annual LTI grant values for our NEOs (assuming target performance) were as follows:

 

Name

 

  

 

LTI

 

Grant Value

 

 C. Viehbacher(1)

  

 M. McDonnell

   $4,000,000

 S. Alexander

   $3,750,000

 N. Murphy

   $3,600,000

 R. Izzar

   $3,500,000

Notes to the 2023 LTI Awards Table

(1) Mr. Viehbacher was not eligible for any 2023 equity grants.

The performance metric for the 2023 PSUs is a three-year cumulative rTSR metric and the 2023 PSUs will vest on the third anniversary of the date of grant, with the number of PSUs earned based on the cumulative rTSR metric. This program design drives our long-term business strategy, is reflective of competitive market practices and aligns with stockholder interests. We believe measuring rTSR is critical to see how we perform in comparison to the market. The actual value (if any) of PSUs will not be

 

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Compensation Discussion and Analysis

 

realized by our NEOs until the three-year period ends and then only if the applicable performance goals are achieved. The table below outlines a summary of PSU awards granted in 2023.

 

 Elements    Description

 rTSR Comparison Group

   Peer group used for executive compensation benchmarking (see page 44)

 Performance Period

   3 years: 2023-2025      

 Performance Goals & Payouts

      Threshold    Target    Maximum
   Goal    25th Percentile    55th Percentile    75th Percentile
   Payout    25% of Target    100% of Target    200% of Target
   There is no payout for performance below threshold and payouts are capped at 200% of target. Payouts are interpolated for performance between threshold, target and maximum.

 Absolute TSR Cap

  

In the event our absolute TSR performance over the 2023-2025 period is negative, any payouts under this program will be capped at target, irrespective of rTSR performance.

The actual value that will be realized from annual PSU awards depends on the degree of achievement of performance goals, with 100% of the PSUs (based on the grant date target value) settled in our common stock based upon achievement of a cumulative three-year rTSR metric. The actual value that will be realized from RSU awards depends on the closing stock price on each of the dates such awards vest. If the vesting price is higher than the grant price, the value of stock that vest will be increased and in contrast, if the vesting price is lower than the grant price, the value of stock that vest will be decreased. Our common stock price is influenced by the company’s performance as well as external market factors.

Changes Implemented for 2024 LTI Program

 

 
As part of its review of the annual LTI program and aligned with stockholder feedback received, the CMDC has updated the
structure of our 2024 LTI program to provide additional emphasis on PSUs, a more balanced assessment of company
performance and improve the objectivity of performance measurement. Changes for 2024 include:
 

Increasing the emphasis on PSUs: PSUs will comprise 60% of 2024 LTI equity awards, an increase from 50% in 2023,

Adding an operational-focused performance metric to the 2024 PSU: In addition to rTSR performance goals, 2024 PSUs will also include a compound annual growth rate of our adjusted EPS (EPS CAGR) performance goal, with the metric weightings evenly split between rTSR and EPS CAGR, and

Expanding the rTSR comparator group: In 2024, rTSR performance will be assessed against a comparator group consisting of all companies in our executive compensation peer group plus constituents of the NASDAQ Biotechnology Index with a $5B market cap or greater which aligns with market practice for rTSR measurement and increases the objectivity of the rTSR comparator group.

 

We expect these changes will strengthen the long-term focus of executives, better align the equity vesting outcomes with the creation of incremental stockholder value and strengthen alignment of executives’ interests with those of stockholders.

2022 LTI Program

The 2022 LTI program operates with the same design as the 2023 program.

2021 LTI Program

For our 2021 PSU awards, 60% of the PSUs (based on the grant date target value) were settled in our common stock based on achievement of pipeline performance goals over a three-year performance period (2021 to 2023) (the 2021 Stock-Settled PSUs) and continued employment through the vesting date. The remaining 40% of the PSUs were settled in cash based on the achievement of three one-year financial goals (2021, 2022 and 2023) (the 2021 Cash-Settled PSUs) and continued employment through the vesting date. Our 2021 PSU awards vested in February 2024.

For our 2021 PSU awards, the number of PSUs earned at the end of the three-year performance period was determined as set forth below:

2021 PSU Awards Table

Set forth below is a summary of the performance metrics and weightings that our CMDC established for our 2021 PSU awards and the degree to which we achieved the performance goals for the 2023 tranche of the 2021 Cash-Settled PSUs.

 

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Compensation Discussion and Analysis

 

Based on our overall performance the multiplier for the 2023 (i.e., third) tranche of the 2021 Cash-Settled PSUs was 94% for our NEOs.

 

             

Percentage
of PSU

Award

  Percentage of PSU
Target Value /Total
LTI Target Value
  Performance
Metrics
  Performance
Metrics Weight
    Performance
Period
    Target
Performance
  Actual
Performance
           

Stock-

Settled:

60%

  60% / 30%   Pipeline Milestone     60     2021-2023     Specific goals are not disclosed for competitive reasons(7)
  Performance
             

Cash-

Settled:

40%

  40% / 20%   Adjusted Free
Cash Flow
    28     2021     $3.1B   $3.4B(1)
    2022     $2.0B   $2.1B(2)
    2023     $1.8B   $1.8B(3)
  Revenue     12     2021     $10.5B to
$10.6B
  $11.1B(4)
    2022     $10.0B   $10.3B(5)
    2023     $9.7B   $9.7B (6)

Notes to the 2021 PSU Awards Table

See Appendix A for a reconciliation of non-GAAP measures.

 

(1)

This financial measure was based on our Non-GAAP free cash flow, as adjusted to add $105.0 million related to an upfront payment made in connection with entering into a collaboration and license agreement with InnoCare Pharma Limited, $43.0 million related to a milestone payment associated with the FDA approval of ADUHELM in the U.S. and $12.0 million related to other commercial milestone payments, partially offset by the subtraction of $116.0 million from the ADUHELM sales impact on working capital, $62.0 million related to the Italy rebate impact and $2.0 million related to share repurchases in 2021 under our 2020 Share Repurchase Program. These items were either not originally contemplated, or their magnitude or timing was uncertain at the time the company performance goals were originally established.

(2)

This financial measure was based on our Non-GAAP free cash flow, as adjusted to add $1.0 million related to share repurchases in 2022 under our 2020 Share Repurchase Program and $917.0 million related to total net payments for a litigation settlement agreement and settlement fees and expenses. These items were either not originally contemplated, or their magnitude or timing was uncertain at the time the company performance goals were originally established.

(3)

This financial measure was based on our Non-GAAP free cash flow, as adjusted to subtract $7.0 million related to share repurchases in 2023 under our 2020 Share Repurchase Program and add $486.0 million related to total net cash payments made in the fourth quarter of 2023 related to Reata. These items were either not originally contemplated, or their magnitude or timing was uncertain at the time the company performance goals were originally established.

(4)

This financial measure was based on our publicly reported revenue of $11.0 billion, as adjusted to neutralize the effects of foreign exchange rate fluctuations.

(5)

This financial result was based on our publicly reported revenue of $10.2 billion, as adjusted to neutralize the effects of foreign exchange rate fluctuations.

(6)

These financial measures were based on our publicly reported revenue of $9.8 billion, as adjusted to 1) neutralize the effects of foreign exchange rate fluctuations; 2) remove SKYCLARYS product revenue; and 3) remove the impact of the change in our presentation of the commercialization expense incurred within the LEQEMBI Collaboration. Beginning in the third quarter of 2023 Biogen presented its 50% share of all global pre- and post-commercialization sales & marketing expense for the LEQEMBI Collaboration within SG&A expense and no longer presented the post-commercialization portion of these expenses as a reduction to revenue. Biogen’s 50% portion of LEQEMBI product revenue, net, and cost of sales, including royalties, continued to be classified as a component of revenue.

(7)

These goals include completing activities critical to advancing therapies through our pipeline including but not limited to milestones associated with LEQEMBI, ZURZUVAE and QALSODY.

The 2021 Stock-Settled PSUs metric, which was approved by our CMDC, was the achievement of a pipeline milestone performance for the three-year period of 2021 through 2023.

Pipeline milestone performance over the three-year period from 2021 through 2023 was selected with the aim to drive our long-term strategic direction and stockholder value creation through our pipeline progress and development.

The 2021 Cash-Settled PSUs financial metrics were adjusted free cash flow and revenue. At the beginning of each year during the performance period for our 2021 Cash-Settled PSU awards, our CMDC approved the targets for each of these financial metrics for such year. When making these grants in 2021, our CMDC decided that because of the nature of our business, in which operating metrics can potentially be impacted positively or negatively by events outside of the control of executives, the design of the PSU program would be based, in part, on the use of three one-year financial goals.

 

 

Our CMDC viewed free cash flow as a critical measure to align the interests of management with those of our stockholders as it reflects the net cash flow available to the company to pursue opportunities and investments that enhance stockholder value. As such, a cash flow performance goal encouraged management to optimize capital expenditures, invest prudently in high return projects and optimize working capital.

 

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Compensation Discussion and Analysis

 

 

We selected revenue as a performance measure to further reinforce the importance of achieving and exceeding our revenue goal and to provide an additional incentive (outside our annual bonus plan) to achieve such goal with the imposition of longer-term vesting requirements to encourage retention.

To further motivate our executives to drive the organization toward the achievement and potential over-achievement of these goals, we provided for a maximum payout opportunity of 200% for our PSU awards. Participants ultimately earned between 0% and 200% of the target number of PSUs granted based on the degree of actual performance goal achievement, generally subject to continued service with the company.

2021 PSU Award Payout

Set forth below is a summary of the performance metrics and weightings that our CMDC established for our 2021 PSU awards and the degree to which we achieved the performance goals for the 2021 Stock-Settled PSUs and the 2021 Cash-Settled PSUs.

2021 Stock-Settled PSUs

 

               Performance Target        
 Performance Metrics    Performance
Period
   Threshold    Target    Max    Results   Weight   Payout  

 Pipeline Milestone Performance

   2021-2023    Specific goals are not disclosed
for competitive reasons
   Above
Goal(1)
  60%   105% 

2021 Stock-Settled PSU Multiplier

  105% 

Notes to the 2021 Stock-Settled PSUs Table

 

(1)

The company continued to expand and re-shape its pipeline of pre-clinical and clinical stage programs through the advancement of internal programs, external business development activities, and exceeding expectations with respect to our clinical stage portfolio. Some achievements which drove this payout included milestones associated with LEQEMBI, ZURZUVAE and QALSODY. Specific details are not disclosed for competitive reasons.

2021 Cash-Settled PSUs

 

                   Performance Target            
 Performance Metrics    Performance
Period
     Threshold      Target      Max      Results   Weight     Multiplier  

 Adjusted Free Cash Flow

     2021      $ 2.8B      $ 3.1B      $ 3.4B      $3.4B(1)     28     160.9

 Revenue

     2021      $ 10.1B      $ 10.5B to 10.6B      $ 11.3B      $11.1B(2)     12     140.5

2021 Tranche of 2021 Cash-Settled PSU Multiplier

 

    155.0 %*(7) 

 Adjusted Free Cash Flow

     2022      $ 1.6B      $ 2.0B      $ 2.3B      $2.1B(3)     28     111.3

 Revenue

     2022      $ 9.5B      $ 10.0B      $ 10.5B      $10.3B(4)     12     139.6

2022 Tranche of 2021 Cash-Settled PSU Multiplier

 

    120.0 %*(8) 

 Adjusted Free Cash Flow

     2023      $ 1.7B      $ 1.8B      $ 2.3B      $1.8B(5)     28     93.2

 Revenue

     2023      $ 9.2B      $ 9.7B      $ 10.9B      $9.7B(6)     12     95.3

2023 Tranche of 2021 Cash-Settled PSU Multiplier

 

    94.0 %*(9) 

* Numbers may not recalculate due to rounding.

  See Appendix A for a reconcilliation of non-GAAP measures.

Notes to the 2021 Cash-Settled PSUs Table

 

(1)

This financial measure was based on our Non-GAAP free cash flow, as adjusted to add $105.0 million related to an upfront payment made in connection with entering into a collaboration and license agreement with InnoCare, $43.0 million related to a milestone payment associated with the FDA approval of ADUHELM in the U.S. and $12.0 million related to other commercial milestone payments, partially offset by the subtraction of $116.0 million from the ADUHELM sales impact on working capital, $62.0 million related to the Italy rebate impact and $2.0 million related to share repurchases in 2021 under our 2020 Share Repurchase Program. These items were either not originally contemplated or their magnitude or timing was uncertain at the time the company performance goals were originally established.

(2)

This financial measure was based on our publicly reported revenue of $11.0 billion, as adjusted to neutralize the effects of foreign exchange rate fluctuations.

(3)

This financial measure was based on our Non-GAAP free cash flow, as adjusted to add $1.0 million related to share repurchases in 2022 under our 2020 Share Repurchase Program and $917.0 million related to total net payments for a litigation settlement agreement and settlement fees and expenses. These items were either not originally contemplated or their magnitude or timing was uncertain at the time the company performance goals were originally established.

 

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Compensation Discussion and Analysis

 

(4)

This financial measure was based on our publicly reported revenue of $10.2 billion, as adjusted to neutralize the effects of foreign exchange rate fluctuations.

(5)

This financial measure was based on our Non-GAAP free cash flow, as adjusted to subtract $7.0 million related to share repurchases in 2023 under our 2020 Share Repurchase Program and add $486.0 million related to total net cash payments made in the fourth quarter of 2023 related to Reata. These items were either not originally contemplated or their magnitude or timing was uncertain at the time the company performance goals were originally established.

(6)

This financial measure was based on our publicly reported revenue of $9.8 billion, as adjusted to 1) neutralize the effects of foreign exchange rate fluctuations; 2) remove SKYCLARYS product revenue; and 3) remove the impact of the change in our presentation of the commercialization expenses incurred within the LEQEMBI Collaboration. Beginning in the third quarter of 2023 Biogen presented its 50% share of all global pre- and post-commercialization sales & marketing expenses for the LEQEMBI Collaboration within SG&A expense and no longer presented the post-commercialization portion of these expenses as a reduction to revenue. Biogen’s 50% portion of LEQEMBI product revenue, net, and cost of sales, including royalties, continued to be classified as a component of revenue.

(7)

We utilized the same performance metrics for the 2021 (i.e., second) tranche of the 2020 Cash-Settled PSUs and the 2021 (i.e., third) tranche of the 2019 Cash-Settled PSUs and, therefore, the multiplier for the 2021 tranche of the 2020 Cash-Settled PSUs and the 2019 Cash-Settled PSUs for the NEOs was also 155% for our NEOs.

(8)

We utilized the same performance metrics for the 2022 (i.e., third) tranche of the 2020 Cash-Settled PSUs and the 2022 (i.e., second) tranche of the 2021 Cash-Settled PSUs and, therefore, the multiplier for the 2022 tranche of the 2021 Cash-Settled PSUs and the 2020 Cash-Settled PSUs for the NEOs was also 120% for our NEOs.

(9)

We utilized the same performance metrics for the 2023 (i.e., third) tranche of the 2021 Cash-Settled PSUs and, therefore, the multiplier for the 2023 tranche of the 2021 Cash-Settled PSUs was also 94% for our NEOs.

2021 PSU Payout

The final payouts under our 2021 Stock-Settled PSUs and 2021 Cash-Settled PSUs were as follows:

 

Name

Target 2021 Stock-
Settled PSU
Award at Grant (#)
Actual 2021
Stock-Settled
PSU Award
Earned (#)
Target 2021
Cash-Settled
PSU Award
at Grant ($)
Actual 2021
Cash-Settled
PSU Award
Earned ($)

C. Viehbacher

M. McDonnell

4,350 4,568 $800,000 $858,580

S. Alexander

3,260 3,423 $600,000 $643,830

N. Murphy

815 856 $150,000 $161,240

R. Izzar

1,305 1,370 $240,000 $257,406

2021 MSUs

MSUs comprised 50% of our executives’ target LTI for 2021. MSUs are performance-based RSUs that are earned based on our common stock price performance from the date of grant to each of the three annual vesting dates. Each annual tranche is assessed against our stock price on the original grant date, such that the awards vesting in 2022, 2023 and 2024 were assessed against the 2021 grant date stock price, thereby aligning long-term executive interests with those of our stockholders. On each vesting date, the performance multiplier is determined based on the stock price growth measured from the grant date to such vesting date using the average closing stock price for the 30 calendar days following and including the grant date and 30 calendar days prior to and including such vesting date for MSUs granted in 2021.

Participants ultimately earned between 0% and 200% of the target number of MSUs awarded based on our actual stock performance. The maximum payout percentage of MSUs granted in 2021 is consistent with those granted in 2020 (200%). Once the performance multiplier was determined, it was applied to the target number of MSUs granted to each executive.

The three-year vesting period ties executive compensation directly to our common stock price performance, as both the MSUs earned, and the value actually received in respect of MSUs are dependent on the performance of our common stock over the three-year vesting period. On each vesting date, the earned MSUs were settled in our common stock. MSUs directly align long-term interests of our executives with stockholders, as the payout is directly tied to stock price performance.

The following table shows the vesting date, performance period and performance multiplier applied for MSUs vesting in 2023 and 2024:

 

Grant Date

Vesting
Date
Performance
Period