Lantheus Holdings Inc. | Interfaith Center on Corporate Responsibility

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<h4>Resolution Details</h4>
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<strong>Company:</strong>
<p>Lantheus Holdings Inc.</p>
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<strong>Year:</strong>
<p>2025 </p>
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<strong>Issue Area:</strong>
<p>Corporate Governance </p>
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<strong>Focus Area:</strong>
<p>Shareholder Rights </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p class=”p1″>RESOLVED: Lantheus Holdings Inc. (“Company” or “Lantheus”) shareholders, including James McRitchie of CorpGov.net, ask that our Company take all steps necessary to reorganize the Board of Directors into one class with each director subject to election each year for a one-year term so that all directors are elected annually.</p>
<p class=”p1″>Although our management can adopt this proposal topic in one year, and one-year implementation is a best practice, this proposal allows the option to be phased in.</p>
<p class=”p1″>Supporting Statement: Fully 90% of S&P 500 companies have declassified boards. Annual elections are widely viewed as a best practice. Annual election of each director makes directors more accountable, improving performance and increasing company value.</p>
<p class=”p1″>According to “What Matters in Corporate Governance” by Lucien Bebchuk, Alma Cohen, and Allen Ferrell of the Harvard Law School, classified boards like Lantheus’ are one of six entrenching mechanisms negatively related to company performance.</p>
<p class=”p1″>Diligent’s database includes the voting record of 47 shareholder resolutions to declassify boards during 2020 – 10/2020. They averaged 74% support. Only one proposal on this topic is reported to have received less than 50% of the vote in 2024.</p>
<p class=”p1″>BlackRock states, “Directors should be elected annually to discourage entrenchment and allow shareholders sufficient opportunity to exercise their oversight of the board.” Vanguard generally votes for proposals to declassify an existing board and votes against management or shareholder proposals to create a classified board.</p>
<p class=”p6″>According to Equilar, a trusted leader for corporate leadership data:</p>
<p class=”p8″>A classified board creates concern among shareholders because poorly performing directors may benefit from an electoral reprieve. Moreover, a fraternal atmosphere may form from a staggered board that favors the interests of management above those of shareholders. Since directors in a declassified board are elected and evaluated each year, declassification promotes responsiveness to shareholder demands and pressures directors to perform to retain their seat. Notably, proxy advisory firms ISS and Glass Lewis both support declassified structures.</p>
<p class=”p1″>The annual election of each director gives shareholders more leverage if management performs poorly. For instance, if management approves excessive or poorly incentivized executive pay, shareholders can soon vote against the Chair of the pay committee instead of waiting for three years under current provisions.</p>

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<h3>Lead Filer</h3>
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<div class=”views-field views-field-nothing”><span class=”field-content”> James McRitchie</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Corporate Governance</span></div>
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Resolution Text

Resolved: Shareholders of Lantheus Holdings, Inc. (‘Lantheus’) request the Board of Directors amend our Lantheus’ policies, articles of incorporation and/or bylaws to provide that director nominees be elected by the affirmative vote of the majority of votes cast, with a plurality vote standard retained for contested director elections, that is, when the number of director nominees exceeds the number of board seats. This proposal includes that a director who receives less than a majority vote be removed as soon as a replacement director can be qualified on an expedited basis. If such a removed director has key experience, they can transition to a consultant or director emeritus. With written justification, the board can set an effective date several years into the future for these changes to take effect.

Supporting Statement: To provide shareholders a meaningful role in director elections, Lantheus’ current director election standard should transition from a plurality vote standard to a majority vote standard when only board-nominated candidates are on the ballot.

Under Lantheus’ current voting system, a director can be elected if all shareholders oppose the director but one shareholder votes FOR, even by mistake. 91.6% of companies in the S&P 500 have adopted majority voting for uncontested elections.

In 2022 majority shares voted FOR similar proposals at 2U Inc. (97.9% for), Warrior Met Coal (66.5%), nCino (98.8%), and IQVIA Holdings (58.6%).

Vanguard, one of our largest shareholders, wrote: “If the company has plurality voting, a fund will typically vote for shareholder proposals requiring majority vote for election of directors.” BlackRock wrote: “Majority voting standards assist in ensuring that directors who are not broadly supported by shareholders are not elected to serve as their representatives.” Many of our other large shareholders have similar proxy voting policies.

Our outdated governance structure reduces accountability. We should not risk Zombies on Board: Investors Face the Walking Dead (https://www.msci.com/www/blog-posts/zombies-on-board-investors-face/02161045315).

Note: SEC rules provide that if shareholders fail to present proposals, without good cause, companies can exclude their proposals for two years. Yet, Lantheus arrogantly treats the process as an empty ritual. At our 2022 annual shareholder meeting, voting was closed immediately following presentation of the last proposal, allowing shareholders no time to vote or change their vote based on the information presented. That was disrespectful.

Carl Hagberg, well-known inspector of elections, suggests that after all proposals have been introduced, companies announce that polls will remain open for 10 more minutes during a discussion or question-and-answer period “to allow voters who have not yet voted or who wish to change their votes online to do so.”[1]

[1] Carl T. Hagberg & Associates, How and When to Properly Open and Close the Polls, The Shareholder Service Optimizer, Second Quarter 2022 https://optimizeronline.com/how-and-when-to-properly-open-and-close-the-polls/

Annual Board Election

Resolution Details

Resolution Text