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Putting the pieces together

Earlier this week, Reuters broke a story about Biomarin Pharmaceutical attracting the attention of activist investor Elliott Management Inc. The news sent Biomarin’s stock up over 10%.

As the Reuters piece noted, Elliott has been “in discussion for months” about the company’s future and had spent over $1b amassing a stake in Biomarin. So when Biomarin announced on Nov. 1 that its longtime CEO, Jean-Jacques Bienaimé, was retiring at the end of November, it now seems pretty clear that Elliott had something to do with that.

Here’s another piece of that puzzle, which came in the form of an 8-K filed after 4 pm on Friday that I highlighted for subscribers to the Friday Night Dump newsletter: Bienaimé will be paid $1.3m for the next year to stick around and provide consulting services to the new CEO, Alexander Hardy, and will also continue to vest in buckets of options beyond the end of the consulting date.

According to the most recent proxy, that could be worth over $50m if the company is sold, which the Reuters piece suggested was a possibility. In exchange, Bienaimé will be required to provide 40 hours a week of consulting for the first six months and 20 hours a week for the second six months, but will be paid the same amount he was making as CEO, when he presumably was working many more hours per week. Both his separation agreement and consulting agreement were attached to Friday’s filing. The separation agreement also makes note of debt forgiveness in the form of a signing bonus and relocation expenses, although I could find nothing in the filings that provided any details on those amounts.

As for the new CEO, Alan Hardy, who joins the company from Roche subsidiary, Genentech, his employment agreement spells out a base salary of just over $1m, a $900K signing bonus, and around $25m in various options and RSUs.

All of this serves as a gentle reminder that there’s often a lot of things going on in the background beyond the headline and even the filings and that putting it all together — much like a giant jigsaw puzzle — can take time and a fair dose of patience. It will be interesting to watch what happens with Biomarin over the next few months and what exactly Elliott’s role was in any of this.