CAMBRIDGE, Mass.--(BUSINESS WIRE)--Genzyme Corporation (NASDAQ: GENZ) announced today that it has adopted new annual and long-term incentive plans for senior executives that will be utilized beginning in 2010. The plans are designed to align incentive compensation with a broader set of measures of company performance. The new incentive compensation program for senior executives is the culmination of a review process first announced last spring.
“These incentive plans were carefully developed following a long and thorough review,” said Genzyme board member and Compensation Committee chair Charles Cooney, Ph.D., a member of the Massachusetts Institute of Technology faculty, and faculty director of MIT’s Deshpande Center for Technological Innovation. “The plans provide shareholders with more transparency into executive compensation decisions, and will encourage senior executives to make decisions that drive growth and shareholder value.”
The company’s senior executive annual incentive plan awards bonuses based on corporate and individual performance. The prior annual incentive plan used one metric - operating income - to measure corporate performance. The new plan includes two corporate financial performance measures: revenue and cash flow return on invested capital. It also includes key business objectives that center on three areas, organization renewal; pipeline advancements; and the recovery of the Personalized Genetic Health business.
An additional business metric, divisional operating income, is applied to leaders of the company’s business units. Together, these corporate performance metrics will determine 80 percent of any award under the plan, and individual performance will determine 20 percent for senior executives.
The new long-term incentive plan is also a performance-based plan with approximately half of the award consisting of a stock and cash grant vesting after three years, but only if the company meets pre-approved financial metrics. For the 2010-2012 performance period, the performance metrics are relative total shareholder return measured against the performance of twenty-eight companies in the S&P 500 Health Care index, and cash flow return on invested capital.
The remainder of an award under the new long-term incentive plan will be comprised of stock options. The prior long-term incentive plan included equity grants that were solely time-vesting and did not include performance metrics.
The company’s new incentive plans are further described in an exhibit to the Form 8-K that the company filed today with the Securities and Exchange Commission.
One of the world's leading biotechnology companies, Genzyme is dedicated to making a major positive impact on the lives of people with serious diseases. Since 1981, the company has grown from a small start-up to a diversified enterprise with more than 12,000 employees in locations spanning the globe and 2008 revenues of $4.6 billion.
With many established products and services helping patients in approximately 100 countries, Genzyme is a leader in the effort to develop and apply the most advanced technologies in the life sciences. The company's products and services are focused on rare inherited disorders, kidney disease, orthopaedics, cancer, transplant and immune disease, and diagnostic testing. Genzyme's commitment to innovation continues today with a substantial development program focused on these fields, as well as cardiovascular disease, neurodegenerative diseases, and other areas of unmet medical need.
Genzyme® is a registered trademark of Genzyme Corporation. All rights reserved.
Genzyme’s press releases and other company information are available at www.genzyme.com and by calling Genzyme’s investor information line at 1-800-905-4369 within the United States or 1-678-999-4572 outside the United States.