Tom Sabatino Waddles to the Front of the "Piggie-Payout Trough", Tonight. . . .

[UPDATED @ Midnight: It seems Ed and I were on the same wave-length, at nearly the same time. . . Do go read his, at Pharmalot.com -- it is quite well-put, and covers some territiory here, that I did not.

To speculate a little more on Ed's reasonable conjecture that Sabatino may have been weighing a competing job offer, elsewhere -- I do wonder, if this is to be explained by some suggestion that Mr. Sabatino had "another offer, waiting" -- whether he is already too-deeply involved (since March 2005) in the core executive team at Schering, to credibly take the posture (before any active, vital board of directors) of a hired-gun -- that is, "pay me what they are offering, or I'll walk". . . .

I guess I think that he should view himself as one of those auto-industry CEOs (and an active board should demand it, of him) -- and agree to work for less, to help clean-up what is plainly his own mess at Schering -- given that he was undeniably at least "asleep at the switch" (in the most-charitable view of the chronology) for the whole period of the ENHANCE delay, and then, later, made the final call on several ill-starred litigation moves -- each of which has backfired (see here, and earlier, see here), on the Schering-Plough stockholders.

Now, as to whether we should take a charitable -- or more jaundiced view of his actions since the beginning of 2007 -- do not forget that he sold nearly $1 million worth of stock back to Schering, off-market, privately, on April 15, 2007 (think individual IRS Form 1040 due date!), at what turned out to be highly-inflated values -- to satisfy his personal tax obligations on huge chunks of compensation he had already received -- in the form of restricted stock.

That is, he effectively stuck Schering with inflated stock prices, on those shares, to cover his taxes, that year, on the lapse of the restrictions -- to do so, he handed Schering's treasury 32,455 shares (then priced at $27.94) -- and kept 37,555 shares, for himself -- or just over a million-dollars worth, at those values.

But that is just the way I see it -- he plainly. . . doesn't.]

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Buried on a Friday night, at the SEC's virtual filing window -- just like Dr. Koestler's before him (by a few months), Schering EVP & GC Tom Sabatino -- while literally tens of thousands of Schering employees have either lost their jobs (due to the market-swoon occasioned by the ENHANCE-Vytorin/Zetia debacle), or been reassigned (due to the acquisition of Organon, late last year) -- has just waddled up to the corporate-piggie-payout trough for a special $500,000 cash bonus -- and a 7.5 percent increase in salary -- to a whopping $857,100 per year.

In addition, select Schering executives (all of Schering's Top Six) have just had their employment agreements amended -- specifically, their severance payments, so as to increase the tax advantages to them -- if any of them happen to be severed after the scheduled roll-back of Bush's much-earlier (2003) tax cuts on the richest one percent of American individuals. Oink. Oink.

So far this year, Schering's common stock has fallen over 46 percent, on the NYSE. The flagship franchise has shed about 30 percent of its profitability, thus far -- and, as a result, Mr. Sabatino is now embroiled (and in some cases, personally named) in over 180 lawsuits -- many of which, at least arguably, it is alleged, would have never been filed in the first instance, had he not been asleep at the switch -- and demanded real action as ENHANCE was repeatedly delayed.

That is, had ENHANCE results been promptly-, and fully-disclosed -- in early 2007, none of this might have transpired. And so, we now learn that the going-price for such "shenanigans" at Schering? $500 large -- no doubt, in 30 [huge ingots] of silver, I am certain. Wow -- take a look:

. . . .Compensation Adjustments for Thomas J. Sabatino, Jr.

The Compensation Committee also took on December 9, 2009, the following actions with respect to the compensation of Mr. Sabatino:

• Effective December 16, 2008, Mr. Sabatino’s base salary will be increased by 7.4%, from $798,000 to $857,100; and

• On December 9, 2008, Mr. Sabatino was granted a special cash award in the amount of $500,000.

The above actions were taken by the Compensation Committee in recognition of Mr. Sabatino’s sustained strong performance as Executive Vice President–Global Law and Public Affairs & General Counsel and the increased responsibility he assumed for Global Administrative Services in October of 2008. . . .

Gee -- that's reassuring -- recall, here, that Schering said it would survey all shareholders about executive pay -- now after that, it does this?! Wow. Hey, Wellington (Schering's single largest stockholder -- at around 12 percent of all outstandings) -- it is time to sharpen your pen -- pound it into a sword, on Monday morn'!

He ought to be ashamed. How many "regular" Schering employees are now pulling "double-duty" -- for no additional compensation -- just fighting for the priviledge of keeping their paychecks, in the tar-baby he, CEO Hassan, and the Top Six have made of Schering in 2008?

And so, Hans Becherer hands him a Cool Christmas half-million -- in cash -- without any earnouts? Were Sabatino a man of true integrity and honor, under these difficult circumstances for his company (and given that he's already been paid multiple millions in cash) he'd decline it -- but I'd not be surprised to learn that he actually helped to engineer it -- albeit indirectly, sub rosa.

And, what of Mr. Becherer's role in this? This is -- to my eye -- a simple, but plainly-actionable breach of fiduciary duty -- a duty to avoid delivering excessive compensation for entirely piss-poor performance (consider this a representative example) -- it actually smells a little like a buy-off -- just as the bump-lump given to Koesler did, at the time.

I trust the plaintiffs in Cain v. Hassan will amend the class action and derivative complaints, to add this turn of events as another count against Mr. Becherer, and the whole of the Compensation Committee.

Where, oh where -- do they find these numbskulls?