NEW YORK (AP) - Bristol-Myers Squibb Co. Chief Executive James M. Cornelius
received a sharp boost in executive compensation in 2007 as the company faced
tougher generic competition prospects and a thinning development pipeline.
Cornelius did not become CEO until Feb. 11, 2008. Until then, he had been
working as interim CEO since September of 2006. He took the interim post after
Peter Dolan was forced out for mishandling a patent settlement over the
company's blood-thinner Plavix.
In 2007 Cornelius' compensation increased by more than fivefold to $13.5
million, with a salary of approximately $1.4 million, a bonus of just under $1.1
million, about $2.2 million in incentives, and other compensation totaling
$424,954. "Other" compensation included required company jet travel, car and
housing allowances.
The bulk of his compensation came from stock options and restricted stock,
worth about $8.4 million on the date they were granted.
Under Cornelius' leadership as interim CEO in 2007, the company's stock fell
1.2 percent to close at $26.52, while profit rose 36.5 percent to $2.17 billion.
Still, the company felt some of the impact of a weakening economy, with some
charges linked to investments and subprime securities. In December, the company
announced a restructuring plan that will cut about 10 percent of its work force
and close more than half of its manufacturing plants to save $1.5 billion by
2010.
Bristol-Myers expects a sharp decline in earnings and revenue after Plavix's
key patent expires in November 2011. Several major drug developers are all
facing key patent expirations for the next several years while generic drug
developers have become more aggressive about challenging often lucrative
patents.
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