When Fred Hassan was hired at Schering-Plough in April of 2003 (that’s his full employment agreement, via SEC’s EDGAR database), he got one truly sweetheart deal. While it was only average on the cash compensation side, it was essentially riskless, as the equity values were in the ditch — and he was getting a LOT of equity; mostly in the form of riskless stock options, at a very low strike price.
So — chalk it up to irony that he would now tell us he transforms cultures of corruption into cultures of integrity. All the evidence points the other way — and points to his enriching himself mightily along the way.
Even so, do read this nonsense written by Fast Fred on Monday:
. . . .When I joined Schering-Plough as CEO in 2003, the company was in trouble with authorities. . . . I had to face 3,000 employees, most of them unhappy, at the national sales meeting. . . .
The meeting was a game changer. We went on to deliver 17 consecutive quarters of double-digit sales growth. . . .
Mr. Hassan’s “17 quarters of double-digit sales growth” is accurate — but misleadingly incomplete. First off, that streak then ended July 1, 2007. And that was. in fact, two and a half years before the merger with Merck was complete. During those two plus years, he presided over a train-wreck of his own making — by (allegedly) delaying the ENHANCE study results. So, certainly, at least the last two years — on his watch, were truly horrific.
Second, and of the greatest relevance here, is HOW he achieved that sales growth.
It was largely on the back of rising Vytorin® sales. And, as we now know, from about November of 2006 until March 30 of 2008, that sales growth was a sham — a fraud. Had it been known, by prescribing physicians (as it has been alleged, in federal court documents) that he and other executives of legacy Schering-Plough knew, or should have known, of the immensely likely pending null-result in ENHANCE, a study which tested Vytorin’s combo-pill performance against a statin alone, and failed (leading Dr. Harlan Krumholz of Yale to wonder aloud whether Vytorin was just a very expensive placebo) — the sales figures would have plummeted, not risen. And that’s exactly what happened — from about late 2007 to 2009, once the study results were known.
A Congressional investigation into the matter began in late 2007, yet Mr. Hassan did not come fully clean about the ENHANCE failure until the end of March of 2008. That event more than any other, forced the sale to Merck. He essentially cratered the company to keep his personal $235 million of all-in compensation corporate jet roaring skyward (all allegedly, of course).
So, you might imagine that I found his latest self-promotion, in the marginalia blog-space of the Harvard Business Review — for his “leadership” book — just a little too precious. He may well view himself as a leader with integrity. I don’t. He’s entitled to his opinions — as am I.
But he is not entitled to “make up” his facts. Now you know — he always has — and likely always will — cherry pick his metrics for measuring his own performance. On that you may certainly rely.
BTW — his hand was seen again this morning, in the Valeant deal: S&P just dropped Valeant’s debt rating to three notches below investment grade — or deep junk status. It did so solely due to the amount of debt Valeant is taking on, from legacy Bausch + Lomb. And yes, that’s a Hassan-Saunders project.
Sad — but you’ve been warned — repeatedly, so.