March 18, 2016
By Mark Terry, BioSpace.com Breaking News Staff
According to a U.S. Securities and Exchange Commission (SEC) filing by Pfizer Inc. , Ian Read, the company’s chief executive officer, was paid a salary, bonus and incentive pay of about $18 million, down from about $23 million in 2014.
This decline, of about 23 percent, is partly to blame on a cut in stock rewards. In 2014, Read received $6 million in stock rewards compared to $2 million in 2015. His salary rose from $1.82 million to $1.86 million and his bonus rose from $3 million to $4.3 million.
Despite the drop, Read completed the acquisition of Hospira, Inc. for about $17 billion, and, of course, initiated the acquisition of Dublin-based Allergan plc which has an enterprise value of about $160 billion.
By comparison, Brent Saunders, chief executive officer of Allergan , received $21.6 million in 2015.
Allergan recently filed with the SEC, which raised a few eyebrows over some of its executives’ severance packages related to the Pfizer-Allergan merger. The size of the golden parachutes themselves weren’t the surprise, at least not to people already familiar with executive compensation, but with the fact that the company also, in several cases, agreed to pay the severance taxes on the compensation packages.
The company agreed to exit packages for five of its top executives totaling $300 million if any of them should not be given a position after the merger. Saunders will be president and chief operating officer of the newly merged company. Allergan’s executive vice president, Bill Meury, is expected to become group president of global specialty and consumer brands of the new company.
But Allergan has agreed to pay the 20 percent excise tax that is typically applied to certain types of executive exit packages. For example, Saunders’ exit package is priced at about $140 million. In the unlikely event that his position at Pfizer plc should fall through, not only would he get the $140 million, but he wouldn’t have to pay the 20 percent excise tax himself, Allergan would pay for it. The proxy filings indicate he would actually be reimbursed an additional $55.1 million to cover taxes.
An exception at Allergan apparently is Executive Chairman Paul Bisaro, who in 2015 received $19 million in compensation. BloombergBusiness indicated that he would be eligible for an exit package approaching $80 million, but Allergan doesn’t plan on reimbursing him for the excise tax.
Frank D’Amelio, Pfizer’s executive vice president for business operations and chief financial officer, received total compensation of $7.2 million. Mikael Doisten, the company’s president of worldwide research and development, received direct total compensation of $6.7 million. Geno Germano, group president of the company’s global innovative pharma business, received total direct compensation of $3 million and John Young, group president, global established pharma business, received $6.9 million.
