If Carrie Cox Is Let Go, Shortly After The Reverse-Merger. . . .

I have, as promised, tried to estimate her "all-in" golden parachute payments -- the amounts she'll walk away with, solely in 2009-2010, assuming the merger is closed on the present terms. By my reckoning, she'll likely garner somewhere between $36 million and $44 million. Significantly, her ultimate pay-out will rise by over $1.59 million – for every dollar over $22.91 that Schering-Plough’s common stock rises, in NYSE trading, as of the reverse-merger date. Wow, that's some Air-Hassan mega bar-tip.

My figures are a little fuzzy, because a modest portion of some of her options may not vest until May 2010, due to changes in the option plans adopted in 2008 -- but other than that, I think the range is a fairly good guess. It does also include about $6.7 million of IRS Section 280G tax gross-up payments -- a figure I did not even attempt to estimate for CEO Hassan's calculation (though he will be entitled to it).

Ms. Cox's golden parachute compensation will be dramatically lower than CEO Hassan's, largely because he has three more years (she came onboard in 2003 2005, as did Hassan, but she liquidated 900,000 options in April and May of 2007 -- see my newly revised last paragraph, below, for more on that) -- CEO Hassan never engaged in any "cashless exercises" of his option grants (they all remain unexercised) and he kept his restricted stock grants -- and all of his grants were several multiples larger than hers. Still -- hers is an outsized package, by any measure. Click the image, at right, to see the "Air Hassan" Flight Attendant, full-sized.

. . . .If the Merck transaction were completed at last night's closing NYSE price ($23.68), Ms. Cox would walk away with about $37.4 million. . . .

Finally -- remember that Ms. Cox netted about $11 million (about $29 million in gross proceeds) by exercisng options in April and May of 2007, before the release of the disappointing ENHANCE results. That amount is not in any of the above figures -- but one ought to consider it as part of her "takeover haul" -- at a bare-minimum. And, perhaps, if we were to accept the securities fraud plaintiffs' view -- we should think of the $11 million as truly "ill-gotten gains". Thus, from a recent filing in the In Re Schering-Plough ENHANCE Securitites Litigation (Case No. 08-397, US Dist. Ct., N.J.):



That would push her total range to between $47 million, and $55 million. This all would be comical -- if 16,000 people weren't going to be put out of work in the process.