Benzinga | Dec 29, 2020 06:24AM EST

Enzo Biochem 13D Shows 5.8% Stake From Roumell Asset Management, LLC; Roumell Criticizes Common Stock Bonuses

From 13D



'On December 28, 2020, the Issuer issued a press release announcing that the Compensation Committee of the Board (the "Compensation Committee") would award Common Stock to each of Dr. Rabbani and Mr. Weiner in lieu of their previously-announced cash bonuses. In addition, the Compensation Committee announced it would be reconstituted after the Annual Meeting to include Drs. Mary Tagliaferri and Ian Walters, who have also agreed that either of them would be willing to serve as Chair of the Compensation Committee if elected. RAM believes this to be a purely reactive, last-minute and incomplete attempt on the part of the Issuer to "address" decades of outsized compensation for woeful performance by Dr. Rabbani and Mr. Weiner. RAM also believes that the dilutive effect of these equity bonuses on shareholders is particularly offensive, as it places greater control in the hands of Dr. Rabbani and Mr. Weiner, who have destroyed so much shareholder value over the past several decades. The Issuer's swift change in bonus compensation demonstrates what RAM believes to be an example of the "check-the-box" approach persistently taken by the Issuer in regards to corporate governance matters. The Issuer has not released any information regarding how the decision to award Common Stock in lieu of previously-announced cash bonuses to Dr. Rabbani and Mr. Weiner came about. Did the Board or Compensation Committee perform any independent benchmarking against bonus compensation for peer companies of the Issuer? Or did Dr. Rabbani and Mr. Weiner yet again force their decisions on a complicit Board?

The Issuer has still not released any shareholder feedback it received regarding the abysmally low level of support the advisory vote on the Issuer's named executive officer compensation (commonly referred to as "say-on-pay") received at the 2019 annual meeting of shareholders (the "2019 Annual Meeting"). To date, there continue to be no publicly-disclosed metrics tying bonus compensation to performance, regardless of whether such bonus compensation be in equity or cash. Instead, the Issuer omitted the Compensation Discussion and Analysis section in the Issuer's "definitive" proxy statement filed with the SEC in connection with the Annual Meeting, stating that as a "smaller reporting company", it is not required to include such section. This appears to be a further tactic of the Issuer to limit the publicly available information related to executive compensation and restrict shareholder oversight.As further described in RAM's definitive proxy materials, the Issuer has continued to severely underperform, and RAM cannot fathom how the Compensation Committee could approve any bonus, whether equity or cash, nor how any recently-appointed Board members could countenance these practices.