Court Grants Final Approval of Settlement in Regeneron Pharmaceuticals, Inc. Derivative Actions

12/4/2018 - Justice Saliann Scarpulla of the New York Supreme Court granted final approval of the settlement of two shareholder derivative cases captioned Public Employees’ Retirement System of Mississippi v. Leonard S. Schleifer et al., Index No. 656813/2017 (N.Y. Co.) and Cement Masons Local 780 Pension Fund and City of Warren Police and Fire Retirement System v. Leonard S. Schleifer, et al., Index No. 654453/2015 (N.Y. Co.).  The settlement of the actions includes reductions in director compensation that will save Regeneron $44.5 million from reduced compensation costs, making it the most significant reduction in director compensation in any excessive director compensation case, ever.  The reductions will begin this month and will continue for five years.

The cases alleged that the then-current and certain former directors of Regeneron Pharmaceuticals, Inc. breached their fiduciary duties by awarding themselves excessive compensation from the company’s equity compensation plans.  Specifically, the complaints alleged that the defendants were unjustly enriched when they approved and/or received allegedly excessive compensation in 2013, 2014, 2015, and 2016, and that they breached their fiduciary duties when they approved the Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan in 2014 and the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan in 2017, which authorized the award of equity compensation to directors and others. 

Praising the settlement, Justice Scarpulla said that:

  • the settlement represents an “outstanding result”;
  • it was a “difficult case” in which the attorneys for the plaintiff shareholders “did a fantastic job”; 
  • she is “very, very pleased” with the settlement and how it was achieved; and
  • Regeneron shareholders should be “very happy” with the result.

If you have any questions, please contact BR&B attorney Michael A. Toomey at (212) 688-0782 or at mtoomey@barrack.com.