8-KShareholder Matters

BIOGEN INC. 8-K Report, Shareholder Vote Results (Jun 10, 2010)

Filed June 10, 2010For Securities:BIIB

Summary

Biogen Idec Inc. (BIIB) filed an 8-K on June 10, 2010, reporting the final voting results from its 2010 Annual Meeting of Stockholders held on June 9, 2010. The filing primarily details the outcomes of key shareholder votes, including the election of four directors to the Board, the ratification of PricewaterhouseCoopers LLP as the independent auditor for fiscal year 2010, and the approval of an amendment to the 2006 Non-Employee Directors Equity Plan to increase available shares. Of particular note for investors, all four nominated directors were elected with significant 'For' votes, indicating shareholder confidence in the current board. The company also secured strong approval for its auditor and a substantial majority for the equity plan amendment, though a notable portion of votes were cast against the equity plan. The filing also references a prior agreement with Carl C. Icahn to withdraw director nominations, suggesting a resolution to potential shareholder activism at the time.

Key Highlights

  • 1All four nominated directors (Nancy L. Leaming, Brian S. Posner, Eric K. Rowinsky, Stephen A. Sherwin) were elected to the Board of Directors with substantial support.
  • 2PricewaterhouseCoopers LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2010, with overwhelming shareholder approval.
  • 3Shareholders approved an amendment to the 2006 Non-Employee Directors Equity Plan, increasing the number of shares available for issuance from 850,000 to 1,600,000.
  • 4The equity plan amendment received a significant number of 'Against' votes (47,014,281), which investors may want to monitor for future governance discussions.
  • 5The filing confirms that a settlement agreement with Carl C. Icahn and affiliated entities resulted in the withdrawal of their director nominations for the 2010 meeting.
  • 6Broker non-votes were a significant factor in the voting tallies for director elections and the equity plan amendment, indicating a substantial portion of shares were not voted by the beneficial owners' brokers.

Frequently Asked Questions

The primary outcomes were the election of all four nominated directors to the Board, the ratification of PricewaterhouseCoopers LLP as the independent auditor, and the approval of an amendment to the equity plan for non-employee directors to increase the share pool. The company also confirmed the withdrawal of director nominations from Carl C. Icahn's group following a prior agreement.

While the election of directors and the ratification of the auditor received strong support, the amendment to the 2006 Non-Employee Directors Equity Plan saw a significant number of 'Against' votes (over 47 million). This suggests some shareholder dissent regarding the increase in equity available for directors.

Broker non-votes occur when a broker holding shares in 'street name' for a beneficial owner does not have discretion to vote on a particular proposal and has not received instructions from the beneficial owner. The substantial number of broker non-votes in the director elections and the equity plan amendment indicates that a considerable portion of outstanding shares were not voted by their beneficial owners on these specific matters.

The filing indicates that the agreement with Carl Icahn, reached in March 2010, led to the withdrawal of his nominations for the 2010 annual meeting. While this resolved potential proxy contest for that year, investors should always monitor communications from significant shareholders for any potential future activist campaigns or governance proposals.