Mediocre Amgen CEO Nets $49 Million Golden Parachute

Mediocre Amgen CEO Nets $49 Million Golden Parachute

March 27th, 2012 // 12:11 pm @

Source: Pharmalot

As Kevin Sharer gets ready to retire as Amgen ceo in May and as chairman at year’s end, he has a lot to look forward to – some $49 million, in fact, according to the proxy filed with the Us Securities and Exchange Commission. The payout will follow a decade in which he spent steering the biotech through a series of events that some critics have described as more tumultuous than productive.

On the plus side, Sharer presided over growth in sales – from $16 billion from $3.6 billion in 2000. And he oversaw the 2002 launch of Neulasta, which is used to reduce infections in patients on chemotherapy and has become the biggest-selling drug in the Amgen portfolio with nearly $3.6 billion in sales last year. And last year, after sustained prodding from disgruntled investors, Sharer agreed to issue the first-ever Amgen dividend to stockholders.

However, Sharer also presided over a large series of setbacks. Over the past four years, there were FDA warnings over health risks associated with the Aranesp and Epogen anemia meds and reduced Medicare reimbursement. Congress investigated marketing practices. The SEC probed a failure to disclose that a key clinical trial ended over safety concerns. Recently, the biotech took a $780 million charge as part of its hope to settle various civil and criminal marketing probes

At one point, he was named one of the worst ceo’s and an Internet petition was circulated demanding his resignation(see this). More recently, he was declared one of the most overpaid ceo’s (read here), and one analysis noted his most recent pay boost was approved by using the controversial practice of peer benchmarking (look here).

Nonetheless, Sharer will be able to collect $6.6 million in accelerated unvested stock options, $7.8 million in accelerated unvested restricted stock units and $12.6 million for the value of performance units between 2010 and 2013 (here is the proxy). There is also deferred compensation with aggregate balance of $22.5 million as of December, including contributions to his retirement plan and portions of compensation from previous years that was deferred, Dow Jones writes. We should note the values could change by the time he retires.

“If you read the Amgen proxy statement, he gets his own permanent office, secretary, pay and all the other benefits, perks, including a company airplane. Kevin knows who on the board will cooperate and then try and grease the others with his charming disposition. Believe me he was the puppeteer. I wonder how he got all those goodies,” says Steve Silverman*, a retired insurance executive who holds an undisclosed amount of Amgen stock in a family trust and who has been a long-standing Sharer critic.

“My thinking is that what Kevin makes is secondary to what’s in the pipeline and should be there. The company has only one new drug that will be a blockbuster, Prolia/Xgeva. Nothing else for this year and next. All due to rather poor management. The company should continue to work on new projects, partners and collaborations… The guy’s done, let’s call it a day; he has milked it for all it’s worth. It seems that poor performance is a good way to make big dollars.”


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