This morning, Ed Silverman quite keenly noted that the CEO of King Pharmaceuticals was named No. 23 of the 25 most overpaid public company CEOs by the watchdog firm, Glass Lewis & Co.
Now, while the Glass Lewis rankings (see page 41 of that PDF file) list Schering-Plough CEO Fred Hassan among its “higest paid” CEOs (No. 33 overall — just a little behind the likes of the Lehman CEO, for example!) — attributing $27.45 million to him as 2007 total compensation — he didn’t place among the “25 most overpaid” — for 2007. This is the law of stale data, in operation.
I can guarantee my readership that he’ll be near the top of the “most overpaid” list (and, even with financial sector debacles, he’ll likely be No. 1 for pharma), next year — when the full-year data for 2008 stock performance is available.
Ed notes, in pertinent part, here:
. . . .King Pharmaceuticals ceo Brian Markison shows up on the firm’s ranking of the S&P 500 Overpaid 25, a dubious distinction. To be specific, Brian ranked No. 23 with about $30.3 million in total compensation, while King stock fell about 36 percent and earnings per share growth plummeted nearly 37 percent. . . .
By way of comparison, CEO Hassan’s compensation will include a new mega-grant of options, made May 2, 2008, and overall compensation that may approach $34 million for 2008 — unless the compensation committee of the Schering-Plough board of directors acts now to cirumscribe it. This, while Schering’s stock price has declined about 51.4 percent from January 2008, as of this morning.
Jaw-slackingly, Hassan made more in 2008 than the entire top five at King in 2007. The Glass Lewis rankings point out (at page 38) that King’s top five executives, collectively, made $21.7 million in the aggregate in 2007, all while the King stock fell 37 percent.
On a simple SEC proxy-tally basis (for 2007) — hold onto your hats, here! — Schering’s Top Five made, in the aggregate, more than three times more than the King top five — or about $65.8 million (for 2007), all while in 2008, Schering’s stock’s value has been literally cut in two — declined, by over half!
Remember also that special equity incentive grants were handed out by Hans Becherer on May 2, 2008, and that Dr. Koestler was given a 16 percent bump (and an 80 percent bonus opportunity) during the year 2008.
When the dust settles, from this current credit pinch, Schering’s compensation committee decision-making processes are likely to come under a very powerful electron microscope. And the bugs and wiggly thingies there apparent will be truly horrific.