BIOMARIN PHARMACEUTICAL INC
For the period ended May 21, 2024. Filed Apr 9, 2024.
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May 21, 2024 · Filed Apr 9, 2024
Contents
Peer Group Process
The Compensation Committee, with the support of the Compensation Consultant and management, reviews trends in biotechnology company compensation practices and reviews and approves the list of peer companies used in the later stages of the process. The Compensation Committee seeks input from management and the Compensation Consultant to ensure the peer group is consistent with our current business model. The Compensation Committee evaluates the criteria used in establishing the peer group to ensure that it appropriately represents the companies competing with us to attract and retain the best employees, who are necessary to drive long-term stockholder value.
The selection of peer group companies is based on various factors including size, market capitalization, development stage, product revenue and product focus. The peer group companies used to set executive compensation for 2023 (the 2023 Peer Group) included commercial biotechnology and specialty pharmaceutical companies with the following features:
| business models with a therapeutic focus and development stage product candidates | revenue generally between $1.0 billion and $5.0 billion | located predominantly in major biotechnology centers |
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The Compensation Committee sets the ranges for the criteria to ensure that it will capture a broad set of companies. The Compensation Committee believes that this provides the best long-term trend data and minimizes year-to-year changes caused by excessive numbers of companies being added or removed due to acquisitions or product successes or failures or other major corporate events.
The Compensation Committee deliberately did not include in the 2023 Peer Group any companies outside the biotechnology and specialty pharmaceutical industries, such as contract research organizations and scientific instrument and materials manufacturing and testing companies. Those companies were excluded for the following reasons:
| their business models are very different from biotechnology companies like BioMarin | they lack the growth and risk profiles of companies in the biotechnology and specialty pharmaceutical industries | they do not share common financial and operational characteristics of biopharmaceutical companies (for example, high gross margins and significant R&D expenses) |
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The 2023 Peer Group is below:
| Alnylam Pharmaceuticals, Inc.BeiGene Ltd.Biogen Inc.Exelixis, Inc.Horizon Therapeutics plc(1) | Incyte CorporationIonis PharmaceuticalsJazz Pharmaceuticals plcNeurocrine Biosciences, Inc. | Regeneron Pharmaceuticals, Inc.Seagen Inc.(1)United Therapeutics CorporationVertex Pharmaceuticals Incorporated |
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(1)Horizon Therapeutics plc and Seagen Inc. were acquired during 2023 and no longer public as of December 29, 2023.
As shown below, when comparing BioMarin against the companies in its 2023 Peer Group (using data as of December 29, 2023 and excluding companies that were no longer public as of such date), our number of employees, our one-year revenue growth and our market capitalization each falls between the median and the 75th percentile, our revenue falls just above the median, our net income falls between the 25th percentile and the median, our total shareholder return (TSR) over the most recent one year is at median, and our TSR over the most recent three years falls between the 25th percentile and the median.
| Employees | Revenue(in millions) | 1-YearRevenueGrowth | Net Income(in millions) | MarketCapitalization(in millions) | 1-YearTSR | 3-YearTSR | |
|---|---|---|---|---|---|---|---|
| 75th Percentile | 6,763 | $6,724 | 23% | $1,181 | $29,310 | 29% | 14% |
| 50th Percentile (Median) | 2,324 | $2,205 | 8% | $191 | $13,353 | -6% | 6% |
| 25th Percentile | 1,212 | $1,779 | 1% | $-165 | $9,371 | -20% | -6% |
| BioMarin | 3,082 | $2,311 | 15% | $147 | $17,948 | -6% | 4% |
| BioMarin Percentile Rank | 61% | 51% | 65% | 46% | 58% | 50% | 44% |
The Compensation Committee also reviews the compensation levels and disclosed program design for executives of Amgen, Inc., and Gilead Sciences, Inc., as we regularly compete with these companies for employees, particularly for senior positions. However, we generally do not use compensation data from these companies in making pay decisions that directly impact the CEO or other NEO positions because revenues and market capitalizations for these companies are significantly higher than BioMarin’s.
| 88 | 2024 Proxy Statement |
Executive Compensation
After the list of peer companies is approved, management presents recommendations to the Compensation Committee regarding proposed adjustments to compensation elements and a variety of supporting data, including compensation information from the peer group and the Radford Global Life Sciences Compensation survey and additional survey sources from the Compensation Consultant. This is presented individually for each executive officer, including the NEOs, and based on classes of positions for all other employees. Management and the Compensation Consultant each include significant supporting data with the presentation. These recommendations are discussed with and without management present and are discussed with the Compensation Consultant. The Compensation Committee then determines what, if any, adjustments to the compensation elements are appropriate for employees other than the CEO.
The Compensation Committee also reviews market information provided by the Compensation Consultant, considers the CEO’s performance and experience and makes recommendations for adjustments to the CEO’s compensation. These discussions are conducted in executive sessions without involvement by management. In particular, our CEO does not play any role with respect to any matter affecting his own compensation and is not present when the Compensation Committee discusses and formulates the compensation recommendation. The Compensation Committee then presents the recommendations for the CEO to the Board for consideration and approval. The Board must approve each of the CEO’s individual compensation elements.
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