XENCOR INC (XNCR)
Sector: Health Care
2026 Annual Meeting Analysis
XENCOR INC · Meeting: June 16, 2026
Directors FOR
3
Directors AGAINST
6
Say on Pay
AGAINST
Auditor
FOR
Director Elections
Election of Directors
Against Analysis
Dr. Dahiyat has served as a director since 1997 and the stock has lost about 54.5% over three years while the peer group median fell only 17.5%, a gap of 37 percentage points that exceeds our 20-point trigger for directors with negative absolute returns; however, the five-year gap of just 3 percentage points versus peers does not exceed the threshold, suggesting the underperformance is relatively recent — as CEO he bears primary responsibility for this recent period, so we vote AGAINST despite the longer-term mitigant.
Dr. Feigal has served since November 2018 and her full tenure overlaps the three-year underperformance period during which the stock trailed the peer group by 37 percentage points; the five-year peer gap of only 3 percentage points is a meaningful mitigant, but given her long tenure and the severity of recent underperformance, we vote AGAINST consistent with policy, noting shareholders may weigh the longer-term record favorably.
Dr. Gorman has served since April 2017 and his full tenure overlaps the three-year underperformance period; while the five-year peer gap of 3 percentage points is below the trigger threshold and represents a genuine mitigant, the three-year gap of 37 points remains material, and we vote AGAINST while acknowledging the longer-term record is adequate.
Mr. Gustafson has served since July 2014 and his full tenure covers the three-year underperformance period; the five-year gap of 3 percentage points is below the threshold and provides genuine mitigation, but the three-year shortfall of 37 points against peers triggers a AGAINST vote under policy, with the note that his longer record is adequate.
Dr. Montgomery has served since March 2015 and his full tenure overlaps the three-year underperformance period; the five-year peer gap of 3 percentage points is below the trigger and is a genuine mitigant, but the three-year gap of 37 points against peers requires a AGAINST vote under policy, with the acknowledgment that his longer track record is adequate.
Mr. Ranieri has served since December 2017 and his full tenure overlaps the three-year underperformance period; the five-year peer gap of 3 percentage points is below the trigger threshold and is mitigating, but the three-year shortfall of 37 points against peers triggers a AGAINST vote, and we note his longer-term record is adequate.
For Analysis
Dr. Deshaies joined the board in July 2025, which is less than 24 months ago, so he is fully exempt from the TSR underperformance trigger and has strong relevant scientific credentials in drug development and biotechnology.
Dr. Klencke joined the board in September 2023, which is less than 36 months ago and her tenure covers less than half of the three-year underperformance period; under policy we flag but do not automatically vote AGAINST directors whose tenure covers less than half the underperformance window, and her strong oncology drug development expertise supports a FOR vote.
Mr. Simpson joined the board in March 2025, which is less than 24 months ago, so he is fully exempt from the TSR underperformance trigger and brings extensive CFO and financial expertise relevant to a clinical-stage biotech.
Six of nine directors are voted AGAINST due to the three-year TSR underperformance trigger: Xencor's stock has declined roughly 54.5% over three years while the company-disclosed peer group median fell only 17.5%, a 37-percentage-point gap that exceeds the 20-point policy threshold for companies with negative absolute returns. The five-year peer gap of only 3 percentage points is a meaningful mitigant that prevents this from being a sustained multi-year failure story, but policy still requires AGAINST votes for longer-tenured directors during the three-year trigger period. Two newer directors (Deshaies and Simpson, both under 24 months) are exempt from the trigger and receive FOR votes; Dr. Klencke (joined September 2023) covers less than half the underperformance window and also receives a FOR vote.
Say on Pay
✗ AGAINSTCEO
Bassil I. Dahiyat, Ph.D.
Total Comp
$5,521,205
Prior Support
N/A
The CEO received total compensation of approximately $5.5 million in 2025, with the majority in equity awards (stock options and restricted stock units) that vest purely based on continued employment with no performance conditions attached — meaning executives are rewarded regardless of whether the company hits any clinical or financial milestones. At the same time, the stock has lost about 54.5% over three years while the XBI — SPDR S&P Biotech ETF gained roughly 66.8% over the same period, a gap of more than 121 percentage points, and the stock trailed the company's own peer group by 37 percentage points. When incentive pay vests on time alone and shareholders have experienced severe losses while biotech peers thrived, the incentive structure is failing to align executive and shareholder outcomes, warranting a AGAINST vote.
Auditor Ratification
✓ FORAuditor
KPMG LLP
Tenure
1 yrs
Audit Fees
$1,017,000
Non-Audit Fees
$139,000
KPMG has served as auditor for less than one year (appointed March 2025) so the tenure trigger does not apply, and non-audit fees (tax services of $139,000) represent only about 14% of audit fees ($1,017,000), well below the 50% threshold; the company recently switched from RSM following disclosed material weaknesses and a restatement, and KPMG is a Big 4 firm fully capable of auditing a company of this size and complexity, so ratification is appropriate.
Overall Assessment
The 2026 Xencor annual meeting presents a ballot dominated by concerns about sustained stock underperformance: six of nine director nominees receive AGAINST votes because the stock has badly trailed both the XBI — SPDR S&P Biotech ETF and the company's own peer group over three years, and the say-on-pay vote also receives an AGAINST because executive equity awards vest on time alone with no performance conditions, creating a disconnect between pay and shareholder experience. The auditor ratification receives a FOR as KPMG is newly appointed with clean fee ratios, and two newer directors and one shorter-tenured director receive FOR votes as they are exempt from or only partially subject to the TSR trigger.
Compensation Peer Group
16 companies disclosed in 2026 proxy filing