On October 15, 2020 Myriad Genetics, Inc. (NASDAQ: MYGN), a global leader in molecular diagnostics and precision medicine, reported that the company has filed its fiscal year 2020 proxy statement and made significant changes to its board structure, executive compensation and corporate governance policies to better serve key company stakeholders (Press release, Myriad Genetics, OCT 15, 2020, View Source [SID1234568507]).
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"Myriad has executed a significant effort during my time as Chair to improve corporate governance to reflect shareholder interests while continuing our mission to improve and transform lives," said S. Louise Phanstiel, chair of the Board of Directors, Myriad Genetics. "By the end of this year, two-thirds of our board will consist of new members who bring deep healthcare and technology expertise spanning payer markets, product development, information technology, and business management. By intensifying our focus on corporate governance and transparency, Myriad is now positioned to advance its leadership in the healthcare industry."
Board Membership
Since the fall of 2019, Myriad has added six new members to its board of directors and announced the retirement of three board members. New board members include Lee N. Newcomer M.D., Colleen F. Reitan, Daniel M. Skovronsky M.D., Ph.D, Daniel K. Spiegelman, Rashmi Kumar, and Paul J. Diaz. Retiring from the board of directors following the annual meeting on December 4, 2020 are John T. Henderson, M.D., Lawrence C. Best, and Walter Gilbert, Ph.D. In March 2020, S. Louise Phanstiel assumed the role of board chair. The new board structure is designed to combine the continuity of tenured directors with new perspectives from recently added members with broad experience in managed care, health technology, and financial oversight.
In addition, Myriad is enacting new policies that reflect industry best practices, including:
Moving from plurality voting to majority voting for directors
Implementing a retirement process for directors at age 75
Expanding the scope of the Audit and Finance Committee and redefining the Strategic Committee to the new Research and Product Innovation Committee
Enhancing board diversity with 44% of board members now reflecting diverse backgrounds
Related Executive Compensation Changes
Myriad also is making multiple changes to its compensation policies to match business performance with compensation. These changes include:
Business objectives for Vice Presidents and above will now be based on company financial performance, with 70% of bonus payout tied to the achievement of revenue and operating income targets
Equity granted as long-term incentive compensation will now consist of 50% performance shares, with the number of shares tied to the company’s performance on earnings per share and relative total shareholder return
Reducing management payouts under a change-of-control and moving to a double trigger system for equity vesting
Elimination of future cash long-term incentive programs
Change in Fiscal Year End
In order to better align with general industry standards for financial reporting and facilitate comparison with other companies, Myriad will adjust its fiscal year end from June 30th to December 31st. Myriad will file an Annual Report on Form 10KT for a six-month transition period from July 1, 2020 through December 31, 2020. Fiscal year 2021 will now run from January 1, 2021 through the end of the calendar year on December 31, 2021.
"As we take decisive actions to enhance governance and drive sustainable, profitable growth, we remain focused on our purpose-driven mission to improve and transform lives by unlocking the power of genetics," Paul J. Diaz, president and CEO of Myriad Genetics. "We will continue to transform our business by listening and responding to the needs of our stakeholders, creating new commercial capabilties, and delivering new levels of value, innovation and service excellence."