Wednesday, March 4, 2009

Yet ANOTHER $3.4 million -- for Schering-Plough CEO Hassan, Tonight.

And 2009 proxy-and-pay season is just barely underway, here! Wow!

In a just-filed Form 4, CEO Fred Hassan has received $3.4 million -- at the February 27, 2009 grant valuation date. These phantom units are equivalent to common shares, except that they are payable in cash, as soon as he leaves the company. This is yet another Hans Becherer-engineered golden parachute.

[In passing, I'll note that each of Messrs. Bertolini, Cheeley, Kohan, Saunders, Sabatino (who already received an unscheduled $500,000, in cash in December 2008 -- about three months ago!), and Ms. Cox received between $1 million, and $1.2 million worth of identical phantom units, as well. Over $9 million in the aggregate, just from this one pot. Sheesh!]

All of the Schering-Plough team members who were severed in 2008 should take a very close look at these figures -- how many of your salaries would have been covered by a renunciation of just this portion of the "Top Six's" 2008 pay package? And for how many YEARS? [Where is the Annual Shareholders' Meeting, this year? Show up! -- Speak out! -- Act up!]:

195,610 Phantom Stock Units. . . . Price: $17.39. . . .

. . . .Each unit of phantom stock is the economic equivalent of one share of common stock. The units of phantom stock will be held in the Issuer's Phantom Stock Fund under the Issuer's non-qualified deferred compensation plan, and will become payable, in cash, following the reporting person's termination of service. . . .

So -- no performance-based pay is present in any of these phantom shares -- and thus they are simply [another] $3.4 million "golden parachute" -- to Hassan, and the top six.

What possible motivational engine is served here, on top of the more than $30 million Mr. Hassan has already been granted by the Board's Compensation Committee? Really -- what purpose do these latest phantom stock units serve? Cue Mr. Becherer (the chair of that committee). [Crickets chirping. . . .]


Anonymous said...

The gall of this management. 10% of the employees are to be let go as part of the PTP, no salary adjustment for people who 'are AE' in their performance appraisal this year, talk of no bonuses for the sales people......amazing..simply amazing.

So, as a stockholder~I never did get the survey. I wonder why?

Well, at least they gave us the French Ocean in Afrin!

Condor said...

You really didn't get a survey?

Do you hold in "street name"?

If so, perhaps your broker is holding it -- call the broker.

More generally, I am baffled by this. If King Pharma's executive management was deemed the most overpaid pharma team in 2008, where does Mr. Hassan see his team, for 2009?

Does he figure he's gone, anyway, and so he better grab all he can -- on his way out the door? This does look like a 'chute. Is he talking about dumping the company in pieces, and engineering his own exit, stage left (with pockets bulging -- nay, well nigh groaning, under the weight of his seemingly-endless personal haul)?

I dunno. I am truly baffled. How do they sleep at night -- knowing that tens of thousands of the Schering-Plough rank-and-file are jobless because of their ineptitude -- and still they grab for more.

Yep -- a just-perfectly wrong note, being struck here, tonight -- by Hassan, Becherer and Ira Kay (the Board committee's retained compensation consultant).


PS: Thanks again for the laugh -- about French sea-water.

Anonymous said...

I wonder if the French water was a project by Organon-and just morphed into the Afrin name?

Nope, never got a survey. Yet, in all my previous years, I've gotten the proxy vote statements. So~I'm not sure why not the survey.

There is a thread on CafePharma that 'soon' an announcement for the sale of S/P.

How do they sleep? Ah, don't take it personally-it is just business. Just like the guys on Wall Street, the Automakers and our last Adminstration. Free market economics=there is no law on making too much money.

(Just ask Frank over on Yahoo)...sorry, not looking to annoy you.

Anonymous said...

Ok, if they are ramping up to leave the company if the company gets bought out, what are the implications for employees who are ready to retire? Should one retire before this news is public because everything will change under new ownership or will the chances that the long timers get some sort of deal to leave be a possibility? What's your take?

Anonymous said...

Did not get a survey either. Always get the annual report and proxy votes but no survey.

Anonymous said...

And it occurred exactly 1 week after the after the complete response for the asenapine approvable letter was submitted to the FDA.

Considering it took only 1 month to respond to the CR letter,(which is nothing) it's possible that an approval letter may be issued before the end of 1Q09.


Condor said...

To the anonymous commenter who is about ready to retire, anyway:

I'd wait. That way you get additional credit for years served under the [old] SGP pension plan, right? [I assume you are under one of te older, more generous plans.]

I actually think waiting it out -- unless you are young, at the beginning of your career, or at the level that you are ALREADY receiving these phantom stock units -- makes sense.

I'll write on it, as to why I think so, soon.


Anonymous said...

Query to the 'potential' retiree~~are you subject to being 'let go' as part of the PTP?

If you are very concerned about a real possibility of being riffed~it may make sense to take a early retirement.

Still~it is all a personal choice and no-one can really know your situation

Anonymous said...

Potential retiree here....Thanks Condor for your input. I concur and look forward to your pontifications on the subject. Yes we are all candidates for the PTP, me included. It is my opinion that being riffed is not a bad thing at this time in my career because it historically comes along with severance. I wait while good scientists work for powerful, out of control greed.

Condor said...

And you all are, in fact, very good scientists.

It is very difficult to serve, nobly, in an evil kingdom, no?

Thanks for stopping by -- do stop back -- and, stay tuned!