$78.6 million; more if the stock rises
above $22.17 during the merger process.
On January 27, 2009, Schering-Plough's Senior Securities Counsel told the SEC, in a so called "no action" letter request, that the company wished to exlude a non-binding "say on pay" proposed shareholder resolution -- from the mailings that would comprise the company's 2009 proxy solicitation materials. The Senior Counsel argued, in part, that Schering-Plough had essentially already adopted the proponent's suggestion -- having announced on October 5, 2008, that the company would engage a Stanford Law School professor, and former CalPERS General Counsel, to oversee a formal "say on pay" survey -- to be mailed with the ordinary 2009 proxy-statement. On March 27, 2009, the SEC Staff's Special Counsel wrote that excluding the proposal would not result in any recommendation of an enforcement action -- on entirely unrelated grounds, however (accepting a company representation that Mr. Loeb, the proponent, had not provided legally-sufficient evidence that he owned Schering-Plough shares, and that he owned them for more than a year). Of course, this March 27, 2009 SEC letter was sent after the March 9, 2009 proposed merger announcement. Interesting.
Thus far, Schering-Plough is apparently not seeking any formal concurrence from the SEC that it might combine its regular annual elections proxy (otherwise due to be mailed early next week), with the proposed merger-related proxy materials (due to be mailed at the end of May 2009). Me? I thought the regular annual materials would be out last night; now I would be surprised if the regular proxy isn't mailed by Wednesday, of the coming week.
Frankly, I wonder how Richard Koppes feels about being associated with all of this back and forth. [Here's an April 5, 2009 Wall Street Journal take on it]. That is, does he think a "say on pay" survey is really irrelevant, simply because there may be a merger, about 10 to 15 months from now? [I wonder why the results couldn't be made available, on an expedited basis, to be INCLUDED in the proposed merger proxy materials -- in about one and a half-months. The data would surely help the newly-constituted SCH-Merck board avoid some of the pitfalls that have arguably led to this merger -- a merger one national columnist called "A Match Made in Purgatory", last week. Another called this, coupled with the Remicade/Simponi to-and-fro (thus including J&J) "A Desperate Love Triangle".]
So, will Schering mail a "say on pay" survey next week, as it had originally promised? Or, will it rely on the fact that the proposed-merger would make this a short-term effort -- "only one year" of applicability? We'll know soon.
Here is the full PDF of the SEC's correspondence file on the matter, but the below is from page 32 of that 58 page file:
January 27, 2009. . . .
. . . .The survey will be mailed with the 2009 proxy materials and the results of the survey will be included in the 2010 proxy statement.
In addition, as specified in the Company's announcement (Exhibit 5 [Page 58 of PDF]), the Company would also provide an avenue for shareholders to provide individual input with an independent third party (Richard Koppes, currently at Stanford Law School and formerly General Counsel of the California Public Employees Retirement System (CalPERS)), on specific concerns of individual investors. This was confirmed to Mr. Loeb, the Proponent, and Mr. Lapham by letter from the Company's Corporate Secretary, dated January 5, 2009 (Exhibit 3), which stated, in part, that the purpose of the survey is:To obtain more granular feedback than a vote would provide. For example, we have heard from colleagues in the United Kingdom that a vote ratifying pay does not mean all shareholders are happy with all features of the executive compensation program and a vote failing to ratify pay does not mean all shareholders are unahppy with the same component (for example, one shareholder might disagree with the perfonnance compensation metrics while another might believe the mix of equity and cash is not optimal).
The Company will monitor the level of interest across all shareholders to determine whether to repeat the survey in future years as a good resource. . . .
We shall see.
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