Alkermes plc
For the period ended May 31, 2024. Filed Apr 15, 2024.
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May 31, 2024 · Filed Apr 15, 2024
Contents
PROXY SUMMARY
This proxy summary highlights information that is described in more detail elsewhere in this proxy statement. This summary does not contain all the information you should consider, and you should read the entire proxy statement carefully before voting. Your vote is very important.
| 2024 ANNUAL GENERAL MEETING OF SHAREHOLDERS | |
|---|---|
| Meeting Date and Time: | May 31, 2024, 2:00 p.m., Irish Standard Time |
| Place: | Connaught House, 1 Burlington Road, Dublin 4, Ireland, D04 C5Y6 |
| Record Date: | March 18, 2024 |
| COMPANY INFORMATION | |
|---|---|
| Ticker: | ALKS |
| Listing Exchange: | Nasdaq Global Select Market |
| Transfer Agent: | Computershare Trust Company, N.A |
| Corporate Website: | www.alkermes.com |
| Investor Relations Website: | investor.alkermes.com |
| Corporate Governance Documents: | investor.alkermes.com/corporate-governance |
Purpose of this Proxy Statement
The board of directors of Alkermes plc (the “Board”) is soliciting proxies for use at the 2024 annual general meeting of shareholders of Alkermes plc (including any adjournments or postponements thereof, the “Annual Meeting”). This proxy statement contains important information for you to consider when deciding how to vote on matters to be brought before the Annual Meeting. Please read it carefully. This proxy statement is first being made available to our shareholders on or about April 15, 2024. This proxy statement is also available online athttp://www.proxydocs.com/ALKS. The specific proposals to be considered and acted upon at the Annual Meeting are summarized below and described in more detail in this proxy statement.
Voting Matters and Recommendations of the Board
| Proposals for Consideration · BoardRecommendation · Page | |||
|---|---|---|---|
| 1 | Election of Directors | FOR ALL BOARD NOMINEES | 22 |
| 2 | Non-Binding, Advisory Vote on Executive Compensation | FOR | 55 |
| 3 | Non-Binding, Advisory Vote on Frequency of Future Advisory Votes on Executive Compensation | 1 YEAR | 56 |
| 4 | Non-Binding Ratification of Appointment of Independent Auditor and Accounting Firm and Binding Authorization of Audit and Risk Committee to Set Independent Auditor and Accounting Firm’s Remuneration | FOR | 57 |
| 5 | Approval of Alkermes plc 2018 Stock Option and Incentive Plan, as amended | FOR | 58 |
| 6 | Renewal of Board Authority to Allot and Issue Shares under Irish Law | FOR | 69 |
| 7 | Renewal of Board Authority to Disapply the Statutory Pre-emption Rights under Irish Law | FOR | 71 |
ALKERMES PLC 2024 Proxy Statement 2
How to Cast Your VoteIf you are a shareholder of record, you have four ways to vote:
Telephone: By calling the toll-free telephone number indicated on your proxy card. Easy-to-follow voice prompts allow you to submit your proxy and confirm your instructions have been properly recorded.
Internet: By going to the Internet website indicated on your proxy card. As with telephone voting, you can confirm that your instructions have been properly recorded.
Mail: By completing, signing, dating and returning a printed proxy card (or proxy form set out in section 184 of the Irish Companies Act 2014, as amended (the “Companies Act”)) via the postage-paid envelope provided with your proxy card (which will be forwarded to the Company’s registered address) or by delivery to the Company Secretary at Alkermes plc, Connaught House, 1 Burlington Road, Dublin 4, Ireland D04 C5Y6.
In Person: By submitting a written ballot in person at the Annual Meeting. To obtain directions to the Annual Meeting, please contact our Investor Relations team at investor_relations@alkermes.com.
Votes via the Internet or by telephone must be received prior to 11:59 p.m. Eastern Standard Time on May 30, 2024 (4:59 a.m. Irish Standard Time on May 31, 2024). Votes by mail must be received by the judge of elections at the Annual Meeting prior to the closing of the polls at the Annual Meeting. If your ordinary shares are held through a bank, broker or other nominee, please follow the voting instructions provided by such bank, broker or other nominee in order for your shares to be voted. If you do not give instructions to your bank, broker or other nominee, your bank, broker or other nominee will not be able to vote your shares with respect to certain of the proposals at the Annual Meeting. We urge you to instruct your bank, broker or other nominee to vote your shares in accordance with the Board’s recommendations. For more information, see the section entitled “General Information About the Meeting and Voting” beginning on page 15 of this proxy statement.
YOUR VOTE IS VERY IMPORTANT. We encourage you to vote as soon as possible so that your shares are represented at the Annual Meeting.
Frequently Requested Information
| Page · Page | |||
|---|---|---|---|
| Active Shareholder Engagement | 10 | Overboarding Policy | 45 |
| Board Diversity Matrix | 23 | Corporate Responsibility and Sustainability | 51 |
| Board Skills Matrix | 27 | Peer Group Selection and Review | 90 |
| The Board’s Role in Oversight of Risks and Opportunities | 34 | Share Ownership and Holding Guidelines | 108 |
| Board Refreshment and Tenure | 44 | Clawback Policy and Recoupment Policy | 108 |
ALKERMES PLC 2024 Proxy Statement 3
Summary of Proposals and Board Recommendations
| Proposal 1Election of Directors | The Board unanimously recommends that you vote FOR the election of each of the Board Nominees | ||||||
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| We are asking you to vote, by separate resolutions, to elect each of the director nominees listed in this proxy statement (each, a “Board Nominee,” and collectively, the “Board Nominees”), each to hold office for a one-year term until our 2025 annual general meeting of shareholders. Each Board Nominee was nominated for election by our Board upon the recommendation of the Nominating and Corporate Governance Committee of the Board (the “Nominating and Corporate Governance Committee”) based on an assessment of their unique experience, qualifications, attributes and skills and their ability to devote sufficient time and attention to Board duties and to otherwise fulfill the responsibilities required of directors. For additional information, see Proposal 1 beginning on page 22 of this proxy statement and the section entitled “Board of Directors” beginning on page 25 of this proxy statement. The below table provides summary information about the Board Nominees. | |||||||
| Name | DirectorSince | BoardPosition | Audit andRisk | Compensation | Nominatingand CorporateGovernance | FinancialOperating | Independent |
| Emily Peterson Alva | 2021 | Member | Member | Member | | ||
| Shane M. Cooke | 2018 | Member | Member | | |||
| David A. Daglio, Jr. | 2020 | Member | Member | Member | | ||
| Richard B. Gaynor, M.D. | 2019 | Member | Chair | | |||
| Cato T. Laurencin, M.D., Ph.D. | 2021 | Member | Member | | |||
| Nancy S. Lurker | 2024 | Member | | ||||
| Brian P. McKeon | 2020 | Member | Member | Chair | | ||
| Richard F. Pops | 2011 | Chair | Member | | |||
| Nancy L. Snyderman, M.D. | 2016 | Member | Member | Chair | | ||
| Frank Anders Wilson | 2019 | Lead Ind. | Chair | Member | | ||
| Christopher I. Wright, M.D., Ph.D. | 2022 | Member | Member | Member | | ||
| Proposal 2Non-Binding, Advisory Vote on Executive Compensation | The Board unanimously recommends that you vote FOR Proposal 2We are asking you to approve, on a non-binding, advisory basis, the compensation of the Company’s named executive officers for 2023. For additional information, see Proposal 2 beginning on page 55 of this proxy statement. |
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| Proposal 3Non-Binding, Advisory Vote on Frequency of Future Advisory Votes on Executive Compensation | The Board unanimously recommends that you vote for the ‘1 YEAR’ option for Proposal 3We are asking you to approve, on a non-binding, advisory basis, the ‘1 YEAR’ option for the frequency of future advisory votes on the compensation of the Company’s named executive officers. For additional information, see Proposal 3 beginning on page 56 of this proxy statement. |
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| Proposal 4Non-Binding Ratification of PwC as Independent Auditor and Accounting Firm; Binding Authorization of Audit and Risk Committee to Set PwC’s Remuneration | The Board unanimously recommends that you vote FOR Proposal 4We are asking you to ratify, on a non-binding, advisory basis, the appointment of PricewaterhouseCoopers LLP (“PwC”) as our independent auditor and accounting firm, and to authorize, on a binding basis, the Audit and Risk Committee of the Board (the “Audit and Risk Committee”) to set PwC’s remuneration. For additional information, see Proposal 4 beginning on page 57 of this proxy statement. |
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ALKERMES PLC 2024 Proxy Statement 4
| Proposal 5Approval of Alkermes plc 2018 Stock Option and Incentive Plan, as Amended | The Board unanimously recommends that you vote FOR Proposal 5We are asking you to approve the Alkermes plc 2018 Stock Option and Incentive Plan, as amended (the “2018 Plan”), as proposed to be further amended to, among other things, increase the number of ordinary shares that are authorized for issuance thereunder by 6,300,000 (subject to adjustment for stock splits, stock dividends and similar events), increase the number of ordinary shares that may be awarded in the form of incentive stock options by the same amount, and effect the other material changes described in Proposal 5.For additional information, see Proposal 5 beginning on page 58 of this proxy statement. |
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| Proposal 6Renewal of Board Authority to Allot and Issue Shares under Irish Law | The Board unanimously recommends that you vote FOR Proposal 6Under Irish law, the directors of an Irish public limited company (“plc”) such as Alkermes must have specific authority from its shareholders to allot and issue any shares, including shares which are part of the company’s authorized but unissued share capital. Our Board’s authority to allot and issue ordinary shares was most recently approved at our 2023 annual general meeting of shareholders (our “2023 Annual Meeting”) and, if not renewed, will lapse on December 29, 2024. We are asking you to renew our Board’s authority to allot and issue shares, up to a maximum of 20% of our issued share capital as at April 10, 2024, for a period of 18 months in accordance with the terms set forth in Proposal 6. Granting to a company’s board of directors authority to allot and issue shares is a routine matter for Irish plcs such as Alkermes.For additional information, see Proposal 6 beginning on page 69 of this proxy statement. |
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| Proposal 7Renewal of Board Authority to Disapply the Statutory Pre-emption Rights under Irish Law | The Board unanimously recommends that you vote FOR Proposal 7Under Irish law, unless otherwise authorized by its shareholders, an Irish plc such as Alkermes generally may not issue shares for cash without first offering those shares on the same or more favorable terms to its existing shareholders on a pro-rata basis. Our Board’s authority to disapply these statutory pre-emption rights and issue new shares for cash was most recently approved at our 2023 Annual Meeting and, if not renewed, will lapse on December 29, 2024. We are asking you to renew our Board’s authority to disapply these statutory pre-emption rights, up to a maximum of 20% of our issued share capital as at April 10, 2024, for a period of 18 months in accordance with the terms set forth in Proposal 7. Granting authority to disapply these statutory pre-emption rights to a company’s board of directors is a routine matter for Irish plcs such as Alkermes. For additional information, see Proposal 7 beginning on page 71 of this proxy statement. |
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ALKERMES PLC 2024 Proxy Statement 5
Business Overview
Alkermes plc (together with its consolidated subsidiaries, “Alkermes” or the “Company” and referred to herein using terms such as “us” or “we”) is a fully-integrated, global biopharmaceutical company. We apply our deep neuroscience expertise to develop medicines designed to help people living with complex and difficult-to-treat psychiatric and neurological disorders.
We have a portfolio of proprietary commercial products that we manufacture and commercialize for the treatment of alcohol dependence, opioid dependence, schizophrenia and bipolar I disorder, and a pipeline of clinical and preclinical candidates in development for neurological disorders. We also manufacture commercial products that incorporate our proprietary technologies under license and receive manufacturing revenues and/or royalties from these and other products that incorporate our proprietary technologies. Headquartered in Dublin, Ireland, we have a research and development (“R&D”) center in Waltham, Massachusetts; a research and manufacturing facility in Athlone, Ireland*; and a manufacturing facility in Wilmington, Ohio.
* In December 2023, we announced an agreement to sell our Athlone, Ireland facility to Novo Nordisk, with the transaction expected to close in mid-2024, subject to certain closing conditions.
2023 Business Priorities and Highlights
Three strategic priorities guided our management of the business in 2023: commercial execution; advancement of our development pipeline; and the separation of our oncology business. Underpinning these priorities and the operation of our business is our foundation of strong corporate governance, our focus on operational efficiency and profitability, our dedication to patients and to our employees, and our commitment to operating in an ethical and responsible manner.
Consistent with these priorities, 2023 was a year of important accomplishments and new developments for the Company. Highlights included:
Successfully grew our revenue
| | Generated total revenues of $1.66 billion, driven by 18% year-over-year growth in proprietary product net sales ($920 million). |
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ALKERMES PLC 2024 Proxy Statement 6
| | Increased net sales of LYBALVI by 100%, generating annual net sales of $192 million. |
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| | Eclipsed $400 million in VIVITROL annual net sales, representing a 6% year-over-year increase. |
| | Achieved ARISTADA annual net sales of $328 million, representing an 8% year-over-year increase. |
| | Prevailed in arbitration with Janssen Pharmaceutica N.V. (“Janssen”), resulting in resumption of significant royalties; royalties from Janssen’s long-acting INVEGA products contributed approximately $486 million in revenue in 2023, including $195 million in back royalties and related interest on 2022 sales. |
Significantly progressed our pipeline programs
| | Accelerated and advanced our phase 1 program for ALKS 2680, our orexin 2 receptor agonist; generated safety and tolerability data in healthy volunteers and presented initial data from the first cohort of patients with narcolepsy type 1. |
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| | Advanced enrollment in two potentially registrational studies for nemvaleukin alfa, an immunotherapy candidate for the treatment of mucosal melanoma and for the treatment of platinum-resistant ovarian cancer in combination with pembrolizumab, prior to the separation of our oncology business (including nemvaleukin alfa) into a new, independent, publicly-traded company. |
| | Generated topline results from a phase 3, open-label extension study that assessed the long-term safety, tolerability and durability of treatment effect of LYBALVI in patients who received up to four years of treatment. |
Continued focus on profitability
| | Achieved net income in accordance with accounting principles generally accepted in the United States (“GAAP”) of $356 million, significantly exceeding our most recent GAAP net income financial expectations. |
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| | Settled the patent litigation related to VIVITROL on favorable terms, delaying generic entry by Teva Pharmaceuticals USA, Inc. (“Teva”) until January 2027. |
| | Completed the separation of our oncology business into a new, independent, publicly-traded company, which is expected to reduce our annual R&D expense by approximately $150 million and to enable us to focus our efforts and capital on our portfolio of commercial products and neuroscience pipeline opportunities. |
| | Announced entry into a definitive agreement to sell our development and manufacturing facility in Athlone, Ireland, consistent with our focus on aligning our infrastructure and cost structure with the needs of our business going forward. |
Strengthened our commitment to our people and our stakeholders
| | Published our 6th Corporate Responsibility Report, highlighting our diversity, inclusion and belonging (“DIB”)-related initiatives, employee wellness and career development programs, key environmental performance data and site-specific conservation and sustainability efforts. |
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| | Awarded grants totaling over $500,000 as part of our Alkermes Inspiration Grants® Program to 11 nonprofit organizations working to address the needs of people living with addiction, serious mental illness or cancer, with a focus on unmet needs in historically under-resourced or underrepresented communities with longstanding and widespread health disparities. |
| | Maintained a DIB-related performance goal for senior leaders that was incorporated into their respective 2023 performance objectives. |
| | Engaged with third-party sustainability consultants to support our efforts to enhance, measure and report our environmental performance. |
ALKERMES PLC 2024 Proxy Statement 7
Corporate Governance Highlights
We strive to maintain strong corporate governance practices that promote the long-term interests of the Company and our shareholders and strengthen the oversight of our management and our Board. Highlights of these practices include the following:
| Board and Governance Practices | Alignment with Shareholder Interests | ||
|---|---|---|---|
| ☑ | Independent Board (other than our CEO) | ☑ | Designees of two shareholders on our Board: |
| ☑ | Engaged Lead Independent Director | • Sarissa (as defined below) designee appointed in 2021 | |
| ☑ | Standing Board committees comprised solely of independent directors | • Elliott (as defined below) designee appointed in 2021• Two additional directors appointed in 2020 with the support of Elliott | |
| ☑ | Robust director overboarding policy | ||
| ☑ | Regular scheduled executive sessions of independent, non-employee directors | ☑ | Active shareholder engagement program with independent director participation |
| ☑ | Annual Board, committee and individual director self-assessments | ☑ | Prohibition of hedging and pledging by executive officers and directors |
| ☑ | Active Board refreshment | ☑ | Alignment of executive pay with performance |
| ☑ | Incorporation of diverse candidates in all director searches | ☑ | Single class of voting shares |
| ☑ | Majority voting standard for uncontested director elections | ☑ | Annual director elections for one-year terms |
| ☑ | Plurality voting standard for contested director elections | Compensation Practices | |
| ☑ | New director orientation and continuing director education | ☑ | Significant portion of CEO and other executive compensation is “at-risk” |
| ☑ | Board access to senior management and independent advisors | ☑ | Annual advisory vote on executive compensation program |
| ☑ | Board participation in executive succession planning and talent management | ☑ | Annual use of equity awards with performance-based vesting |
| ☑ | Annual review of Corporate Governance Guidelines and other corporate policies | ☑ | Incorporation of ESG and DIB considerations into short-term incentive-plan |
| ☑ | Code of Business Conduct and Ethics | ☑ | No excessive perquisites |
| ☑ | Annual publication of environmental, social and health performance data | ☑ | Double trigger change in control vesting provisions for grants to executive officers |
| ☑ | Share ownership and holding guidelines for executive officers and directors | ☑ | No repricing of stock options |
| ☑ | Board and committee oversight of enterprise risk management, including ESG (as defined below) matters | ☑ | Clawback policy and recoupment policy in respect of certain equity and cash compensation |
| ☑ | Executive-sponsored employee resource groups in support of DIB initiatives | ☑ | Independent compensation consultant |
We regularly review and refine our governance policies and practices based on market best practices, shareholder feedback and the evolving needs of our business. In recent years, we took a number of actions to further enhance our corporate governance policies and practices and our Board structure, composition and diversity, which are described below under “Recent Enhancements to Corporate Governance Policies and Practices” beginning on page 11 of this proxy statement.
ALKERMES PLC 2024 Proxy Statement 8
Board of Directors – Overview
Each year, as part of our annual Board evaluation process, the Nominating and Corporate Governance Committee reviews the qualifications and experience of our Board as a whole to assess alignment with our strategic priorities. The Board Nominees possess significant experience in the areas set forth below. For a listing of qualifications and experience by individual Board member, see the Board skills matrix on page 27 of this proxy statement.
Our Board is substantially independent, has a strong representation of directors who are diverse in terms of age, self-identified gender and race/ethnicity, and has a mix of newer and longer-tenured directors, providing what we consider to be an appropriate balance of experience, institutional knowledge, fresh perspectives and skillsets. The following graphics reflect the composition of the Board and attributes of the Board Nominees as of April 1, 2024.
For additional information about our Board composition, including specific qualifications and experience of, and other information about, the Board Nominees, see the section entitled “Director Diversity, Qualifications and Experience” beginning on page 26 of this proxy statement.
Board and Committee Refreshment Highlights
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Since 2019, appointed a total ofeight new, independent directors, including four diverse directors in terms of gender or race/ethnicity, further strengthening the Board’s diversity and expertise in areas of importance to our business strategy.
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Since 2019, a total ofsix longer-serving directors have retired from the Board.
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Since June 2021, all members of the Nominating and Corporate Governance Committee have been diverse in terms of gender or race/ethnicity.
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In December 2023, appointed Andy Wilson as the Board’snew Lead Independent Director.
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In December 2023, refreshed the membershipand leadership of the Compensation Committee, adding a new independent member and appointing a new independent chair.
For additional information, see “Board Refreshment and Tenure” on page 44 of this proxy statement.
ALKERMES PLC 2024 Proxy Statement 9
Active Shareholder Engagement
Our management team and our Board value, and frequently solicit and respond to, the views of our shareholders. We interact with investors throughout the year and regularly engage with our shareholders through open dialogue and direct communication on a variety of topics, including our business and growth strategy, financial performance, corporate governance, executive compensation practices and environmental, social and governance (“ESG”) matters.
Shareholder Outreach, Engagement and Feedback
For the past several years, we have increased the frequency and scope of our shareholder engagement activities, actively solicited shareholder feedback and, when appropriate and determined by the Board to be in the best interests of the Company and its shareholders, made changes to our governance, compensation and other practices in response to the shareholder feedback received. Our Lead Independent Director and other members of our Board have participated in certain of these shareholder engagements alongside representatives of management. The primary areas of discussion during these engagements related to:
Board refreshment, composition and diversity, and related disclosures;
the Board’s role in oversight of business risks and opportunities, including ESG risks and opportunities tied to our business strategy;
corporate responsibility and sustainability, including our annual Corporate Responsibility Reports and our human capital development and other DIB initiatives;
executive compensation, including the importance of alignment between pay and performance, measurable metrics against which to assess performance, and transparent disclosure in respect of compensation decisions;
opportunities and plans for operational efficiency, optimization of the Company’s cost structure and enhanced profitability; and
business strategy and execution, including the recently completed separation of our oncology business.
Board Responsiveness to Shareholder Feedback
Feedback from our shareholder meetings is discussed with management and relayed to the full Board and the relevant committees of the Board, as appropriate. After careful consideration of the feedback received, our Board and management team have taken the following actions, among others:
| Enhanced Corporate Governance•Significantly refreshed the Board•Declassified the Board•Increased Board diversity•Enhanced ESG disclosures•Refined corporate governance policies and practicesSee page 11 of this proxy statement. | Enhanced Compensation Program •Further aligned pay and performance•Enhanced measurability and disclosure of executive pay•Refined peer group•Linked incentive compensation opportunities to profitability See page 84 of this proxy statement. | Continued Focus on Profitability•Actively managed the business to optimize costs and operational efficiencies in support of profitability •Formed a Board committee to oversee achievement of profitability targets and cost optimization |
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2023 Annual Meeting Results and Continued Engagement
At our 2023 Annual Meeting, each of our director nominees was re-elected by a plurality vote (due to the contested nature of the election) and each of our other proposals was approved by shareholders, with support ranging from approximately 76% to 99% of the votes cast. Following the 2023 Annual Meeting, we continued our engagement efforts, requesting meetings with shareholders who collectively held approximately 70% of our outstanding shares and holding meetings with shareholders who collectively held approximately 50% of our outstanding shares. Our Lead Independent Director participated in certain of these meetings, including when requested by shareholders, alongside representatives of management.
We remain committed to engaging with shareholders and other stakeholders on a regular basis to solicit and consider their views on our business strategy and performance, executive compensation programs and corporate responsibility, sustainability and governance practices.
ALKERMES PLC 2024 Proxy Statement 10
Recent Enhancements to Corporate Governance Policies and Practices
Following careful consideration of shareholder feedback, the evolving needs of our business and market trends in governance practices, our Board has taken the following actions in recent years to enhance our corporate governance policies and practices:
| Declassified the Board | In June 2021, we asked our shareholders to approve amendments to our articles of association (the “Articles of Association”) to declassify the Board over a three-year period. Since our 2022 annual general meeting of shareholders, each director up for election is eligible for a one-year term. The Board will be fully declassified as of the Annual Meeting. |
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| Limited outside directorships | In May 2022, the Board revised its policy regarding outside directorships to further limit the number of public company boards on which our directors may serve (our “overboarding” policy). See page 45 of this proxy statement for details. Each of our directors is, and was at all times during 2023, in compliance with this overboarding policy. |
| Refreshed Board and committee membership and leadership | Since September 2019, the Board has engaged in significant refreshment activities, resulting in the appointment of eight new, independent directors, including two in 2021, one in 2022, and one in 2024, each further strengthening the Board’s expertise in targeted areas of importance to our business strategy and adding to its diversity. In addition, six of our longer-serving directors have retired from the Board since 2019. See the section entitled “Board Refreshment and Tenure” beginning on page 44 of this proxy statement.During 2023, our Board also appointed a new Lead Independent Director and refreshed the membership and leadership of the Compensation Committee, adding a new independent member and appointing a new independent chair. |
| Enhanced Board diversity | Since 2011, women have comprised no less than 20% of our Board, and currently comprise 27% of our Board. Overall, 45% of our current Board members are diverse in terms of gender or race/ethnicity.In September 2019, the Board codified our practice in respect of Board nominees, which requires that diverse candidates, including candidates who are women and candidates from underrepresented communities, be included in any pool from which the Nominating and Corporate Governance Committee considers and selects director nominees. Consistent with this policy, diversity of membership, including in respect of gender and race/ethnicity, is considered when the Nominating and Corporate Governance Committee evaluates director candidates for our Board, and each of the four new directors appointed to our Board since 2021 is diverse in terms of gender or race/ethnicity, and also contributes significantly to the diversity of experience and skills of our Board. |
| Enhanced disclosure of Board composition | In recent years, we have included a Board skills matrix in our proxy statement, which highlights the overall composition of our Board and specific skills, qualifications, and other attributes of each of our directors that contribute to the diversity and effectiveness of our Board and its committees. See page 27 of this proxy statement. |
| Board self-assessment facilitated by independent third party | In 2023, our Board engaged an independent third party to facilitate the annual self-assessment of the Board, its committees and its individual directors, and changed the methodology utilized for collection of director feedback to also include individual interviews. See the section entitled “2023 Further Enhancements to Board Self-Assessment Process” beginning on page 43 of this proxy statement. |
ALKERMES PLC 2024 Proxy Statement 11
| Implemented plurality voting for contested elections | In May 2022, we asked our shareholders to approve amendments to our Articles of Association to provide for a plurality vote standard for contested director elections. |
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| Refined share ownership and holding guidelines | In February 2022, we revised our Share Ownership and Holdings Guidelines to exclude, for purposes of determining the value of shares owned by a director or officer, the value of (i) vested but unexercised options and (ii) unvested performance-based restricted stock unit awards. |
| Expanded scope of Clawback Policy Adopted new Incentive Compensation Recoupment Policy | In May 2021, we expanded the Clawback Policy of Alkermes plc (our “Clawback Policy”) to apply to certain cash-based incentive compensation in addition to equity-based incentive compensation. Effective October 2023, we adopted a new Alkermes plc Incentive Compensation Recoupment Policy (our “Recoupment Policy”), which complies with the recently adopted Rule 10D-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Nasdaq Listing Rule 5608.For additional detail, see the section entitled “Clawback Policy and Recoupment Policy” beginning on page 108 of this proxy statement. |
| Continued to integrate ESG considerations into our business | Since 2020, we have included objectives related to corporate responsibility and other ESG considerations in our annual corporate objectives and short-term incentive plans for our employees, including our named executive officers.From 2020 - 2023, the Board adopted various amendments to its committees’ charters to codify the oversight responsibilities of each committee in respect of our ESG initiatives. |
| Enhanced ESG- related disclosure | Each year since 2018, we have published a Corporate Responsibility Report, highlighting our corporate responsibility, sustainability and DIB initiatives and certain environmental performance data and related risk management activities. These reports are available on the Responsibility section of our website at www.alkermes.com. For additional information about our ESG initiatives, see the section entitled “Corporate Responsibility and Sustainability” beginning on page 51 of this proxy statement. |
We remain committed to corporate governance best practices and regular engagement with our shareholders and other stakeholders to solicit and consider their views on these practices, our executive compensation programs, our corporate responsibility and sustainability initiatives, and our business strategy and performance. We invite shareholders to email us atinvestor_relations@alkermes.com with any suggestions, comments or inquiries. Shareholder proposals, nominations and other notifications required under the Companies Act or our Articles of Association should not be sent to this e-mail address, but rather should be delivered as set forth in this proxy statement, our Articles of Association and/or the Companies Act, as applicable.
ALKERMES PLC 2024 Proxy Statement 12
Executive Compensation High lights
Our executive compensation program is overseen by the Compensation Committee of our Board (the “Compensation Committee”), in consultation with its independent compensation consultant. The program is focused on attracting and retaining experienced and well-qualified executive officers who will help advance our critical business objectives, and rewarding them for performance that contributes meaningfully to the creation of shareholder value. The guiding principles and objectives of our executive compensation program include:
| Pay-for-Performance | Align with Interests of our Shareholders | Balance Short- and Long-Term Incentives | Attract and Retain Key Talent |
|---|---|---|---|
| We believe in a pay-for-performance approach that supports our business objectives and, as such, a significant portion of each named executive officer’s compensation is performance-based and at-risk | We provide an overall compensation package that rewards individual and Company performance against our corporate objectives to promote the creation and retention of value for the Company and its shareholders | We structure our executive compensation program to align with, and balance, the short- and long-term focus required for success in the biopharmaceutical industry | We seek to attract and retain a highly-skilled workforce by providing a total compensation package that is competitive with other employers who compete with us for talent |
2023 Compensation Program Highlights
Our executive compensation program highlights include the following:
Significant Portion of “At-Risk” Compensation: A significant portion of the target total direct compensation opportunity for our Chief Executive Officer (“CEO”) and other named executive officers is comprised of “at-risk” compensation in the form of annual cash performance pay opportunities and long-term equity incentive awards. See the sections entitled “Pay Mix – Significant Portion of Executive Compensation is “At-Risk”” on page 87 of this proxy statement, “Executive Compensation Philosophy and Objectives” on page 89 of this proxy statement and “Long-Term Equity Incentive Compensation—Annual Grant” on page 101 of this proxy statement.
Performance-Vesting Equity Included in Annual Grants to All Named Executive Officers: In 2023, the Compensation Committee conditioned vesting of greater than 50% of the total target value of our CEO’s equity grant and approximately 25% of the total target value of the equity grants made to each of our other named executive officers, on achievement over a three-year performance period of financial and pipeline objectives aligned with our long-term business strategy and on relative total shareholder return over the same period. See the section entitled “Long-Term Equity Incentive Compensation—Annual Grant” on page 101 of this proxy statement.
ESG and DIB Objectives Incorporated Into Short-Term Incentive Plans (“STIPs”): The Board and the Compensation Committee understand the importance of ESG and DIB considerations to the Company and its stakeholders and, in 2023, continued to incorporate corporate objectives related to ESG and DIB matters into the Company’s short-term incentive plan for our named executive officers. See the section entitled “2023 Corporate Objectives” on page 94 of this proxy statement.
Double Trigger Change in Control Vesting: Starting in 2023, the Compensation Committee eliminated single trigger change in control vesting provisions in all equity awards granted to our named executive officers, replacing them with double trigger change in control vesting provisions.
Strong Compensation Governance Attributes: Our executive compensation policies and practices are designed to reinforce our pay-for-performance philosophy, align with compensation-related governance best practices and further our compensation objectives. See the section entitled “Strong Compensation Governance Attributes” on page 86 of this proxy statement.
2023 Advisory Vote on 2022 Executive Compensation. At the 2023 Annual Meeting, shareholders supported our executive compensation program, with approximately 79% of the votes cast in favor of our say-on-pay proposal. Excluding the shares voted “against” this proposal by the shareholder that initiated a contested director election at our 2023 Annual Meeting and has since liquidated its shareholdings in the Company, the support level would have been approximately 87% of the votes cast on this proposal. As noted above under “Extensive Shareholder Engagement,” we value, and frequently solicit, shareholder feedback on our executive compensation programs, and shareholders have generally acknowledged the Board and Compensation Committee’s responsiveness and significant enhancements to our executive compensation programs in recent years.
ALKERMES PLC 2024 Proxy Statement 13
Corporate Responsibility, Sustainability and ESG Matters
Corporate responsibility is inherent in our mission and our values as an organization. We actively work to support people living with complex neurological and psychiatric disorders, including opioid dependence, alcohol dependence, schizophrenia and bipolar I disorder, and to help break down barriers that prevent access to care. As we do this important work, we are committed to operating and growing our business in a manner that promotes transparent governance and strong ethics; maintains extensive patient, employee and other stakeholder engagement; and helps us grow our organization strategically, sustainably and responsibly, including with respect to our ESG impacts.
Our ESG Pillars
The following pillars are deeply integrated into our business, and we incorporated goals related to these pillars into the Company’s 2023 corporate objectives and corresponding 2023 short-term incentive plan:
| EnvironmentalWe are committed to responsible environmental stewardship. We have implemented enterprise-wide Environmental, Health, Safety and Security initiatives and management strategies designed to mitigate or reduce risk, protect employee health and safety, minimize our environmental impacts and enhance the sustainability of our operations. | SocialWe strive to foster a diverse, inclusive and collaborative workplace culture in which employees are engaged and have access to resources and support to help them thrive both personally and professionally. Our patient-centered approach drives our external-facing efforts such as patient engagement and advocacy activities, and corporate grant programs, which seek to support patient communities in our therapeutic areas of focus. | GovernanceWe govern the Company with strong ethics and corporate governance practices, comprehensive management and Board oversight of our business and operations, compliance with applicable laws and engagement with our stakeholders. Our policies are designed to support risk mitigation, enhance the security of our people and information, and maintain our commitment to product quality and patient safety. |
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Our ESG Oversight Structure
Our Board and its committees are responsible for overseeing ESG initiatives and risks and opportunities tied to our overall business strategy.
| Nominating and Corporate Governance CommitteeResponsible for overseeing our corporate governance practices and policies, including those related to: | |||
|---|---|---|---|
| ☑ | Corporate responsibility and sustainability, and environmental, health and safety matters | ☑ | Management and leadership development and executive succession planning |
| ☑ | Employee matters, including DIB | ☑ | Director overboarding and conflicts of interest |
| ☑ | Board evaluation, composition and refreshment | ☑ | Political contributions and lobbying activities |
| Audit and Risk CommitteeResponsible for overseeing our broader enterprise risk management process, which integrates risks related to various ESG matters, including those presented below, and our mitigation activities related to such risks, and for overseeing the integration of ESG-related disclosures into the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”), as appropriate. | |||
| ☑ | Environmental, health, safety and security programs | ☑ | Cybersecurity, information technology and data privacy |
| ☑ | Environmental stewardship and sustainability matters, including climate change | ||
| Compensation CommitteeResponsible for recommending to our Board the incorporation, as appropriate, of ESG considerations into our annual corporate objectives and executive and Company-wide incentive compensation plans, including in respect of environmental sustainability, social responsibility, employee engagement and DIB, and for ensuring that the Company’s compensation and benefits programs and practices are supportive of our human capital management initiatives, including those related to: | |||
| ☑ | Talent and leadership development, recognition and retention | ☑ | DIB objectives |
ALKERMES PLC 2024 Proxy Statement 14
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.