Regeneron Pharmaceuticals (REGN) shareholders have been on a rocket ride over the past five years, as their stock surged more than 550 percent, thanks to Eylea, a Regeneron drug used to treat macular degeneration, a type of blindness. But those shareholders have company: The company’s board of directors.
According to a report released last week by Equilar, the part-time directors of the Tarrytown, New York-based firm were the highest-paid of any board members in the S&P 500 in 2015. Their median retainer of $2.06 million was nearly $1 million higher than second-place finisher Vertex Pharmaceuticals (VRTX), whose board members earned on average $1.23 million.
Vulcan Materials (VMC), which sells crushed gravel, stone and sand, was third, with its directors getting average pay of $274,601. The median pay for S&P nonemployee directors was $270,000 last year on an individual basis, Equilar says. Regeneron and Vertex together accounted for 12 out of the top 20 highest-paid directors. Nine Regeneron directors earned more than $2 million.
Before you apply for one of these plum spots, being a director isn’t for everyone.
“Now more than ever, directors are facing increasing workloads, regulations, and scrutiny,” according to Equilar. “Directors are tasked with a growing list of responsibilities, with some accompanied by inherent risk and liability. … Meanwhile, shareholder engagement has become standard practice at the largest companies -- often involving additional time commitments from board members -- to ensure effective communication with constituents around effective strategies and financial goals.”
Because of these additional responsibilities, the median compensation for S&P 500 directors increased 17.1 percent from 2011 to 2015. Of course, some got a lot more, such as Donald James at Vulcan Materials, who was awarded $8 million in 2015, the most of any S&P director. His compensation was about two-thirds of the board’s total pay of $11.1 million. James was formerly Vulcan’s executive chair before taking on the nonexecutive chair position and then subsequently retiring.
Two directors from Rupert Murdoch’s media empire, David DeVoe of 21st Century Fox (FOXA) and News Corp’s (NWSA) Joel Klein, were ranked second and third, with retainers of $7.8 million and $4.6 million, respectively.
Officials with Regeneron, whose total board compensation of $18.56 million also was tops in the S&P 500, didn’t respond to a request for comment for this story. The drug company’s stock has been more earthbound lately, tumbling nearly 30 percent this year as it faced sluggish sales of its anticholesterol drug Praulent and a disappointing study involving a combo treatment featuring Eylea.
Profits in the most recent quarter were hurt by the increased costs Regeneron shouldered to make Eylea more affordable to macular degeneration patients.
Vertex, whose shares have jumped more than 98 percent over the past five years, declined to comment for this story. However, the drugmaker’s stock has disappointed investors lately, falling more than 30 percent this year after sales of its cystic fibrosis treatment Orkambi disappointed Wall Street in the most recent quarter. Most of the compensation reported in its 2015 proxy isn’t worth anything today because of the decline in its share price.
Vulcan Materials declined to comment on James’ retainer. The company’s stock has climbed about 12 percent since the start of the year.
Though being a board member has its share of responsibilities, these part-time positions pay salaries most working Americans can only dream about.