ASX 200 Biotech Company Aligns Director Remuneration and Shareholder Interests Across Multiple Countries

Challenge: A GECN Greater Asia/Australia company worked closely with an ASX 200 biotechnology client that had four long-term promising products in the pipeline. The products needed management and board expertise from multiple countries. To that end, the company found it was easier to have a global management compensation framework than a Board Director one. To attract and retain Directors, the company’s compensation had to be reasonable from each home country point of view, acceptable to institutional shareholders across various Organisation for Economic Development (OECD) countries, and recognize that cash conservation is critical to a biotechnology company with multiple development projects. Under Australian listing rules, director grants of new securities, as well as the remuneration report, need shareholder approval.

Approach: This GECN company helped the company develop an alternative framework that incorporated Board Director stock options, delivered in a way that did not compromise their independence while still being tax-effective across multiple jurisdictions. In addition, some proxy adviser guidelines were not configured to approve option grants to Board Directors. We engaged a critical proxy advisor to ensure that the plan, which was more unusual than comparable plans, was fully understood and clearly articulated to shareholders.

Results: The Director framework was considered by the critical proxy advisor and key investors as a superior model to other plans, and received overwhelming investor support.

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