Regeneron's Len Schleifer, George Yancopoulos start their ambitious 5-year plan, earning a front-loaded $270M combined
As biotech whiz kid Regeneron prepares to move into the next phase of its growth, founding partners Len Schleifer and George Yancopoulos placed a big bet on themselves late last year with a long-term performance plan worth a potential $1.4 billion. Now — with those front-loaded, conditional stock awards in the bank —can both men stick the landing?
Schleifer and Yancopoulos earned $135 million and $134 million, respectively, in 2020 on the back of the New York drugmaker’s work advancing one of the earliest antibody cocktails for Covid-19 through an FDA emergency use authorization, according to a proxy filing with the SEC.
Those are pay packages that would easily rank among the highest in the Fortune 500 — but the figures are slightly misleading. Both Schleifer and Yancopoulos earned a $130 million stock award in 2020 tied to five-year performance share units (PSU) that will cash out in December 2028 after a three-year holding period.
The current value of those PSUs for each executive is $130 million, but as part of a rejiggered compensation package approved by Regeneron’s board, those units could end up much more valuable. The board set tiered milestones for both executives’ possible awards with a target goal of cumulative 65.6% growth over five years. Hitting that number on the nose would earn both Schleifer and Yancopoulos a cool $196.5 million each.
But on the absolute high end of what the board thinks is possible — 140% share growth over five years at a 19.2% annual rate — both Schleifer and Yancopoulos would be due a whopping $713.3 million each. Even if Regeneron doesn’t hit the award threshold of 31.3% growth over the next five years, Schleifer and Yancopoulos can still earn half of the 248,108 PSU target figure if the drugmaker’s share price outperforms the Nasdaq Biotechnology Index by 200 basis points over that time. That would also be no easy task as the index has seen nearly 50% growth over the past five years.
Hitting that top-end figure, equivalent to a $1,150 share price, will take some doing as the company’s shares have traded mostly flat over the previous five years. Since July, the company’s shares have declined roughly 28% from a peak of $658.21 during the hype over its antibody cocktail for Covid-19.
As it stands, Schleifer and Yancopoulos are due a big paycheck either way in 2028 in lieu of the typical annual incentives. Meanwhile, both executives’ base salary saw a slight bump in 2020, with Schleifer earning $1.48 million and Yancopoulos $1.17 million.
In terms of the usual perks, both executives’ bills actually went down on the year, with Schleifer taking home about $300,000 and Yancopoulos $120,000. Regeneron covers both corporate air travel as well as private air travel for both men as well as their spouses and children, the filing said.
Meanwhile, as Regeneron raced to develop its Covid-19 antibody pair, both men were also detailed security in November 2020, adding on to their preexisting residential security and secure car transportation. Other players in the Covid-19 response — Moderna’s Stéphane Bancel, for instance — were given similar details for their safeguarding.