Moderna CEO Stephane Bancel
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Moderna’s board of directors approved a golden parachute for CEO Stephane Bancel worth more than $926 million at the end of last year, up from $9.4 million in 2019 before Covid-19 upended the world order.
The value of Bancel’s so-called change-in-control package has varied as a bulk of it, $922.5 million, is in the biotech company’s stock, which has swung widely over the course of the pandemic along with the company’s progress in making a vaccine to fight it. Bancel’s exit package also includes a cash severance payment of $1.5 million and a bonus of $2.5 million if the company is sold and he’s terminated.
Moderna’s shares reached an all-time high of $497.49 on Aug. 10, shortly before the Food and Drug Administration cleared booster shots of its blockbuster Covid vaccine for vulnerable people. But they were trading at $253.98 on Dec. 31 when the package was valued and have since dropped by about 45% to around $140 a share this week.
Even at that reduced share price, his exit package — which only becomes a reality only if the company’s sold and he loses his job — is eye popping. Moderna didn’t return requests for comment.
The value of the golden parachute was disclosed Wednesday in the company’s annual proxy report that details compensation packages for the company’s highest-paid executives. The filing shows the rewards for executives at the young biotech company where most of the pay is rooted in the company’s volatile equity.
His total compensation awarded for 2021 was $18.2 million, a 41% increase over 2020. Bancel’s compensation last year included $15 million in stock awards and options as well as a $1.5 million bonus on top of his $990,385 salary. Moderna spent an additional $661,000 providing personal security for Bancel and his family last year.
Moderna President Stephen Hoge’s total compensation represented a fraction of his other rewards. He cashed out $165.9 million in stock options in 2021 on top of his regular compensation. Chief Technical Officer Juan Andres similarly cashed out $194.3 million in options, outside of his usual pay.
Moderna, which was little known outside biotech circles before the pandemic, had a blockbuster 2021. The biotech company swung to profitability on the success of its vaccine for the first time last year. Moderna booked net income of $12.2 billion after reporting a loss of $747 million in 2020. Moderna’s share price soared 143% in 2021 as the company successfully rolled out its two-dose Covid vaccine.
The vaccine remains Moderna’s only commercially available product, though the company is also developing shots to fight the flu and other infectious diseases. Moderna sold $17.7 billion of its shots in 2021, accounting for virtually all of the company’s revenue. Moderna is projecting $19 billion in sales for 2022 based on signed sales agreements with governments across the world.
Hoge’s total compensation of $7.8 million includes stock awards and options totaling $6 million and bonus of $819,000 on top of his salary. Hoge’s total compensation is a 48% increase over 2020.
Andres received $6.6 million in total pay, with $5 million in stock awards and options as well as bonus of $756,000 on top of his salary. His total compensation rose 55% over 2020.
Chief Financial Officer David Meline received $5.2 million in total pay, including $4 million in stock awards and options as well as a $560,000 bonus on top of his salary. Meline’s total compensation dropped 44% from 2020.
Moderna fired its chief commercial officer Corinne Le Goff last year. The company, in its proxy report, said it is looking for someone with more experience in consumer health. Le Goff received a severance payment of $1 million.
Moderna has been sharply criticized by activist groups such as Oxfam for profiting from the vaccine while not doing more to share its technology with poorer nations. Oxfam America, which owns 376 shares of Moderna common stock, has filed a proposal for the annual shareholders meeting to assess the feasibility of transferring the biotech company’s intellectual property to boost vaccine production in the developing world. Moderna holds its meeting on April 28.
“We believe backlash from Moderna not sharing information needed to manufacture its vaccine in low- and middle-income countries could tarnish its reputation, threaten its social license to operate, and undermine relations with the U.S. government,” Oxfam’s proposal read.
Moderna’s board of directors has called on shareholders to vote against the proposal. The board, in its rebuttal, argued that Oxfam’s recommendation would have a negative impact on the safety and quality of the vaccine as well as long-term confidence in the messenger RNA technology the shots use.
Moderna is currently locked in a patent dispute with the National Institutes of Health, which helped develop the vaccine, over the technology underlying the shots. White House chief medical advisor Dr. Anthony Fauci, in a call with reporters last week, suggested the NIH would license the technology globally if it wins the dispute with Moderna.
Moderna’s board said the company has agreed to supply 650 million doses to Covax, an international alliance that promotes better access to Covid vaccination in lower and middle income countries. Moderna has also said it will not enforce its Covid-related patents during the pandemic. The biotech company has also reached a preliminary agreement with Kenya to build a vaccine production in the East African nation to support immunization in Africa.