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Genzyme doesn’t give chief a bonus

Woes at Allston plant cited for decision

Henri A. Termeer drew total compensation of $9.5 million, 25 percent below his 2008 compensation, the firm said. Henri A. Termeer drew total compensation of $9.5 million, 25 percent below his 2008 compensation, the firm said.
By Robert Weisman
Globe Staff / March 12, 2010

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Genzyme Corp.’s embattled chief executive, Henri A. Termeer, did not receive a bonus last year because of production problems at the company’s Allston Landing plant. But Termeer still drew total compensation of $9.5 million, 25 percent below his 2008 compensation, according to a proxy statement filed yesterday by the Cambridge biotechnology company.

In the statement, released in advance of the company’s annual meeting this spring, Genzyme also nominated its nine board members for reelection. It urged shareholders to reject four candidates being nominated by billionaire investor Carl C. Icahn, who owned 4.8 million Genzyme shares, just under 2 percent of the company, at the end of 2009.

Icahn, who frequently purchases stakes in companies whose stock price has tumbled, began buying Genzyme shares last year after the company suffered a string of setbacks because of manufacturing problems at its plant on the Charles River. Genzyme temporarily suspended production there last summer, and rationed a pair of enzyme replacement drugs, after a virus was discovered at the plant.

The bulk of Termeer’s compensation for 2009, almost $7.7 million, was in restricted stock and stock options that will vest over time. The Genzyme board’s compensation committee “believes it is appropriate for equity awards to comprise a significant portion of Mr. Termeer’s total compensation,’’ citing compensation data for chief executives at peer companies, the proxy statement said.

Termeer also received a salary of $1.7 million, up from $1.6 million the prior year, and retirement savings contributions of $124,000, up from $115,000. But while he received a $1.9 million bonus in 2008, he was not awarded any bonus money for last year.

Genzyme spokesman Bo Piela said the bonus for senior executives is awarded in two parts: for obtaining corporate objectives and individual objectives. No executives got the portion based on corporate objectives, he said, because the company’s operating income didn’t meet its target last year. And while other executives received awards for meeting personal objectives, Termeer did not, Piela said.

“He recommended to the board that he not receive that because of the manufacturing issues we faced last year,’’ Piela said.

Genzyme’s board urged stockowners “not to sign or return any proxy card sent to you by the Icahn entities,’’ the proxy statement also said. It was the board’s first formal response to the slate of candidates proposed by Icahn, which includes Icahn himself.

“We believe that the nine members on our board now are highly qualified and talented people who fulfill the specific needs of the company,’’ Piela said.

Piela said Genzyme directors also were concerned that Icahn’s investment in another Cambridge biotechnology company, Biogen Idec Inc., may pose a conflict.

Genzyme has applied for Food and Drug Administration approval to treat multiple sclerosis with its anticancer drug Campath. That could put it in competition with Biogen Idec, which markets several drugs to combat multiple sclerosis.

Robert Weisman can be reached at weisman@globe.com.